LIBRARY 

OF    THE 

UNIVERSITY  OF  CALIFORNIA. 
Class 


THE    CITIZEN'S   LIBRARY 


Railway  Legislation  in 
the   United  States 


BY 


BALTHASAR  HENRY  MEYER,  PH.D. 

PROFESSOR  OF  INSTITUTES  OF  COMMERCE 
UNIVERSITY  OF  WISCONSIN 


R  A 

OF  THE 

UNIVERSITY 

fefo  gorfc 
THE   MACMILLAN   COMPANY 

LONDON:   MACMILLAN  &  CO.,  LTD. 
1903 

All  rights  reserved 


COPVH^X,  ,,03. 
Bv  THE  MACMILLAN  COMPANY. 


Set  up,  electrotyped,  and  published  June,  1903. 


J.  S.  Gushing  &  Co.  —  Berwick  &  Smith  Co. 
Norwood,  Mass.,  U.S.A. 


PREFACE 

THE  aim  of  this  volume  is  to  present  a  con- 
densed analysis  of  the  private  and  public  laws 
which  govern  railways  in  the  United  States,  and 
of  the  important  decisions  relating  to  interstate 
commerce.  Statements  and  comments  are  based 
upon  actual  analysis  and  in  large  part  upon  ana- 
lytical tables  of  charters  and  laws  enacted  in  the 
various  states.  These  tables  present  so  many 
typographical  difficulties  that  it  was  not  thought 
expedient  to  publish  them. 

Chapter  IV  of  the  Introduction  originally  ap- 
peared in  the  Annals  of  the  American  Academy  of 
Political  and  Social  Science,  for  January,  1902  ; 
and  chapters  II,  III,  and  IV  of  Part  III  appeared 
in  the  Political  Science  Quarterly  for  September, 
1902.  The  author  desires  to  acknowledge  his  in- 
debtedness to  the  editors  of  these  publications  for 
their  courtesy  and  kindness  in  permitting  the  use 
of  this  material  in  the  present  volume.  Part  II 
was  included  in  a  more  general  form  in  a  report 

published  in  Volume  IX   of   the    Report   of   the 

v 

114934 


PREFACE 

United  States  Industrial  Commission,  "  Railway 
Regulation  under  Foreign  and  Domestic  Char- 
ters." It  is  hoped  that  the  addition  of  specific 
references  will  add  to  the  value  of  this  material  in 
the  present  volume. 

B.    H.    MEYER. 

MADISON,  WISCONSIN, 
January  12,  1903. 


VI 


CONTENTS 


PAGE 

PREFACE  v 


PART   I 

INTRODUCTION 

CHAPTER  I 
THE  SIGNIFICANCE  OF  RAILWAYS 

Railways  as  creators  of  a  new  world I 

Extent  of  the  railway  system  of  the  United  States  ...  3 

The  beginnings  of  railways  in  different  countries     ...  4 

Railways  in  the  employ  of  nations  ...  5 

CHAPTER   II 

CHARACTERISTICS  OF  RAILWAY  LEGISLATION  IN  THE 
UNITED  STATES 

The  harness  and  the  horse 7 

The  geographical  diffusion  of  charters 8 

The  general  nature  of  railway  charters 9 

Special  charters  and  general  laws 10 

The  observance  of  general  laws 1 1 

Diversity  in  regulative  features n 

Defect  of  railway  legislation 12 

Constitutional  tendencies         .         .         .         .         .         .  13 

vii 


CONTENTS 

CHAPTER  III 

FOREIGN  SIDE-LIGHTS 

PAGE 

International  relationship  of  railway  charters          ...       14 
Public  and  private  activity  in  different  countries     .        .        .17 

Extent  of  special  legislation  in  Europe 18 

Classification  of  railways          . 19 

The  doctrine  of  free  competition  among  railways   .        .        .21 

Definitions  in  laws 23 

Rate  of  progress  in  the  introduction  of  railways     ...       24 

Influence  of  internal  improvements 25 

Federal,  state,  and  private  efforts 27 


CHAPTER  IV 

ECONOMIC  ADJUSTMENTS 

Relation  of  railway  and  public  interests          ....  29 

Possibility  of  lack  of  harmony 30 

Three  general  propositions 31 

Railway  conferences 33 

Industrial  departments  of  railways 34 

The  lack  of  a  regularly  constituted  middle  ground          .        .  35 

A  proposed  plan  of  advisory  councils 36 

The  aim  of  this  plan 4° 

The  council  system  fits  into  the  present  order  of  things  .        .  42 

The  origin  of  the  advisory  system 43 

Its  progress 44 

Knowledge  leads  to  harmony 47 


viil 


CONTENTS 
PART   II 

THE  PROGRESS  OF  RAILWAY  LEGISLATION 

CHAPTER   I 
EARLY  RAILWAY  CHARTERS 

PAGE 

Early  railway  charters 53 

General  characteristics 54 

Charter  provisions  as  to  rates 56 

Publicity  of  rates 62 

Discriminations 64 

Administrative  agents 65 

Powers  reserved  to  the  legislature 67 

Limitations  on  the  life  of  charters 69 

Limitations  on  the  power  of  taxation 70 

State  participation 71 

Miscellaneous  provisions 74 

CHAPTER  II 

LATER  CHARTERS  AND  EARLY  GENERAL  LAWS 

General  characteristics 80 

The  Northern  Pacific  franchise 83 

Early  general  laws •        •      88 

CHAPTER  III 
CONSTITUTIONAL  PROVISIONS 

General  considerations 97 

Acceptance  of  the  constitution 98 

Corporations  organized  under  general  laws  99 

ix 


CONTENTS 

PACK 

Previously  granted  charters Ioo 

Special  charters      ........  IQO 

Railways  common  carriers Ioo 

Eminent  domain  and  public  use IOI 

Power  to  annul  charters           .......  102 

Public  aid 102 

Intersections,  junctions,  and  consolidations     ....  103 

Vote  of  shareholders       ........  104 

Free  transportation          ........  104 

Regulation 104 

Pooling  .                  105 

Miscellaneous .106 


CHAPTER   IV 
PRESENT  GENERAL  RAILWAY  LEGISLATION 

Terms  applicable  to  later  charters 108 

Conditions  under  which  railway  companies  may  be  organized  1 10 
Contents  of  articles         .         .         .         .         .         .         .         .in 

Other  characteristics        .         .         .         .         .         .         .  115 

Corporate  life  and  reserved  rights  of  the  State        .         .  117 

Determination  of  route  ........  121 

Equipment      .         .         . .126 

Quality  of  service 129 

Consolidations  and  pooling 136 

Tickets :  Scalping,  redemption  of  unused  tickets,  passes         .  141 

Long  and  short  hauls 145 

Discriminations       .........  148 

Rates:   Publicity  and  revision 151 

Access  to  books 158 

Annual  and  other  reports 159 

x 


CONTENTS 

PAGE 

Issues  of  stocks  and  bonds 162 

State  railway  commissions 163 

Summary  of  commission  laws          ,        ,         ,        .         .         .     1 70 


PART    III 

THE  PAST  AND  FUTURE    OF  THE  INTERSTATE 
COMMERCE   COMMISSION 

CHAPTER   I 
EVENTS  PRECEDING  THE  ACT  TO  REGULATE  COMMERCE 

The  nature  of  early  federal  legislation 189 

Congressional  committees       .......     190 

The  influence  of  the  "  Granger  "  movement    .        .         .        .191 

Munn  vs.  Illinois 193 

The  feeling  of  uncertainty 194 

CHAPTER  II 

LEADING  PRINCIPLES  OF  THE  DECISIONS  OF  THE 
COMMISSION 

Nature  of  the  decisions 195 

The  kind  of  problems  involved 196 

Competition  and  the  long  and  short  haul        .         .         .         .  197 

The  question  of  rates 205 

Classification  . 213 

Through  rates 216 

Pooling   ...........  220 

An  estimate  of  the  work  of  the  commission     ....  222 

xi 


CONTENTS 

CHAPTER   III 

THE  SUPREME  COURT  AND  THE  INTERSTATE  COMMERCE 
COMMISSION 

PACK 

Four  groups  of  decisions 224 

The  interpretation  of  the  long  and  short  haul  clause       .         .  224 

Power  of  the  commission  over  rates 230 

Power  of  the  commission  to  secure  evidence  ....  234 

Agreements  and  contracts  among  competing  railways     .        .  239 

CHAPTER  IV 
THE  CULLOM  BILL 

The  present  situation 243 

The  number  of  changes  involved  in  the  bill    .        .        .         .  245 

The  history  of  suits  brought  by  the  commission       .        .         .  246 

Promptness 247 

Power  over  rates 248 

Relief  from  orders 250 

Published  rates  the  only  rates 251 

A  uniform  classification  . 254 

Provisions  on  accounting 256 

Railway  cooperation 257 

Standing  of  decisions  of  the  commission          ....  258 

The  incidence  of  fines  for  violation  of  the  law        ...  258 

APPENDIX  I 

AN  AMERICAN  RAILWAY  CHARTER 263 

APPENDIX  II 

ARTICLES  OF  INCORPORATION  UNDER  GENERAL  LAWS  .        .  275 

xii 


CONTENTS 


APPENDIX   III 

PAGE 

THE  MASSACHUSETTS  COMMISSION  LAW       .       .       .       .279 


APPENDIX  IV 
THE  INTERSTATE  COMMERCE  LAW 287 

SUPPLEMENT 

THE  ELKINS  LAW 318 

INTERPRETATION  OF  THE  ELKINS  LAW        .       .        .       .323 

INDEX 327 


Xlll 


PART   I 
INTRODUCTION 


v 


IAPTER   I 

THE  SIGNIFICANCE  OF  RAILWAYS 

THE  introduction  of  railways  created  a  new 
world.  So  accustomed  have  we  become  to  a 
civilization  with  railways  that  it  requires  conscious 
efforts  to  realize  the  economic,  social,  political, 
and  moral  influences  which  have  emanated  from 
them.  Just  as  a  single  life  spanned  the  gap  be- 
tween the  Declaration  of  Independence  and  the 
laying  of  the  first  rail  of  the  Baltimore  and  Ohio 
on  July  4,  1828,  so  a  single  life  still  active  upon 
the  scene  may  have  stored  in  its  experiences  all 
the  manifold  changes  wrought  by  this  modernized 
stage-coach ;  and  the  experiences  of  youth  united 
with  the  work  of  manhood  and  the  reflections  of 
old  age  constitute  the  history  and  philosophy  of 
railways  as  we  know  them  to-day. 

For  every  four  hundred  of  the  population  of  the  ^ 
United  States  there  exists  one  mile  of  railway,  or 
an  aggregate  of  nearly  196,000  miles.     These  rail-p- 
ways  directly  employ  more  than  one  out  of  every 
hundred   of   the   population.      They   represent   a 
capitalization  equal  to  about  one-eighth  of  the  total 
wealth    of    the    country,    annual    gross    earnings 
amounting  to  $23  per  capita,  net  earnings  equal  to 

^  3 


RAILWAY    LEGISLATION 

$7.67  cents  per  capita,  and  $2  yearly  in  dividends 
for  every  enumerated  member  of  this  nation.  For 
every  fifty-five  persons  the  railways  operate  one 
freight  car,  and  they  place  at  the  disposal  of  every 
sixteen  hundred  persons  a  little  less  than  one 
passenger  coach.  Had  all  persons,  young  and 
old,  travelled  the  same  distance,  each  would  have 
travelled  218  miles ;  and  the  tons  of  freight  carried 
one  mile  approximates  1860  per  capita.1  These  are 
mere  playthings,  but  they  are  likely  to  convey  to 
one's  mind  more  definite  notions  than  these  same 
facts  expressed  in  accurate  statistics. 

The  beginnings  of  railways  in  all  countries  were 
accompanied  by  opposition  from  interests  that 
looked  upon  steam  locomotion  as  a  threatening 
power.  The  fear  of  economic  derangements  acted 
as  a  retarding  force  even  in  localities  devoid  of 
adequate  means  of  transportation  and  communica- 
tion. In  territories  enjoying  improved  facilities 
this  opposition  sometimes  resulted  in  violence. 
Of  the  latter,  the  United  States  knows  relatively 
nothing;  the  former  can  be  illustrated  in  every 
state  and  territory.  The  early  opposition  to  rail- 
ways foreshadowed  in  a  negative  manner  what 
actual  development  was  to  demonstrate  in  a  posi- 
tive way  with  respect  to  their  social  and  economic 
influences.  The  pack-horse,  the  stage-coach,  and 
the  country  tavern,  and  all  that  goes  with  these 

1  Based  upon  figures  compiled  from  official  sources  for  The 
Commercial  Advertiser  for  November  29,  1902,  Financial  Supple- 
ment, and  the  Reports  of  the  Interstate  Commerce  Commission. 

4 


THE    SIGNIFICANCE    OF    RAILWAYS 

were  soon  superseded  by  other  agencies  better 
adapted  to  meet  the  new  conditions  of  life.  Limit- 
less areas  were  transformed  into  fruitful  farms, 
and  the  railways  themselves  became  objects  of 
wealth  in  the  land  whose  value  they  had  helped 
to  create.  The  isolated  settler  was  placed  in  touch 
with  the  world ;  and  his  wants,  no  longer  depend- 
ent upon  garden  or  farm  or  local  market,  could 
draw  for  their  satisfaction  upon  the  storehouses 
of  the  earth.  The  merchant's  bazaar  henceforth 
could  offer  commodities  produced  under  many 
flags,  and  the  man  of  learning  exchanged  ideas 
with  scholars  the  world  over.  International  unions, 
scientific,  literary,  industrial,  and  political  even, 
sprang  up  in  quick  response  to  the  throbbing  of 
the  larger  life.  The  "bonds  of  consanguinity," 
concerning  which  earlier  American  statesmen  ex- 
pressed so  much  solicitude,  could  now  be  preserved 
indissolubly  among  all  sections  of  our  country. 
The  government  became  omnipresent  and  the  law 
omnipotent.  Such  was  the  revolution  caused  by 
the  railway. 

As  a  means  of  accomplishing  great  ends,  the 
significance  of  railways  is  not  diminishing.  Russia 
is  using  railways  in  order  to  gain  permanent  con- 
trol of  Manchuria ;  in  Persia  railway  rates  provide 
a  means  of  evading  the  most-favored-nation  clause 
of  treaty  obligations ;  Germany  is  financiering  a 
railway  through  the  Tigris-Euphrates  valley  in 
order  to  gain  influence  in  what  is  destined  to 
become  a  clearing-house  of  continents,  while  at 

5 


RAILWAY    LEGISLATION 

home  Germany  is  making  her  railways  the  occa- 
sion of  a  closer  federation ;  in  South  Africa  the 
railways  constitute  the  greatest  lever  for  raising 
that  long-suffering  region;  Canada  is  sending  loco- 
motives as  missionaries  into  her  great  northwest; 
Mexico  is  attempting  to  use  railways  in  controlling 
trusts  and  adverse  tariff  legislation ;  Peru  is  trying 
to  push  the  iron  road  over  the  Cordilleras  and 
unite  ocean  and  river ;  in  the  United  States  "  twen- 
tieth century  limited"  and  " overland  limited" 
trains  are  closing  the  "suture"  between  East  and 
West.  The  world  over  railways  are  harnessed  in 
the  interest  of  progress.  To  be  sure,  railways 
have  made  and  unmade  towns ;  they  have  caused 
flowers  to  blossom  and  to  wither;  they  have  stran- 
gled one  and  made  the  other  fat ;  they  have  raised 
their  wizard's  wand  and  commanded  puppets  to 
do  their  bidding ;  they  have  placed  legislatures  on 
wheels  and  hauled  them  whither  they  had  con- 
structed the  track.  But  with  it  all,  railways  have 
been  and  continue  to  be  one  of  the  greatest  agents 
of  universal  progress  which  the  world  has  ever 
known.  If  we  can  but  harness  the  railway  as  an 
institution  as  the  railway  engineer  has  harnessed 
the  steam  in  his  locomotive,  human  progress  will 
be  accelerated  and  human  welfare  become  more 
widely  diffused.  This  harness  is  the  law. 


CHAPTER  II 

CHARACTERISTICS   OF    RAILWAY    LEGISLATION    IN 
THE  UNITED  STATES 

THE  law  as  a  harness  has  been  an  oddly  con- 
structed harness.  The  collar  has  been  unevenly 
padded,  so  that  parts  of  the  shoulder  have  borne 
most  of  the  pressure  and  become  sore,  while  other 
parts  have  escaped  the  pressure  of  the  draft.  The 
traces  have  been  constructed  of  material  of  vary- 
ing degrees  of  strength ;  and  they  have  been  cut 
of  unequal  length,  adding  to  the  discomfiture 
resulting  from  a  badly  constructed  collar.  Im- 
portant buckles  have  been  left  out,  and  not  all 
the  straps  have  been  sewed  together.  The  horse 
has  at  times  become  restless.  Sometimes  this 
restlessness  has  been  due  to  his  intolerance  of 
all  restraint,  and  sometimes  to  the  misfit  of  the 
harness.  The  makers  of  the  harness  have  not 
always  taken  care  to  get  the  measurements  of 
the  horse,  relying  unduly  upon  their  casual  ob- 
servations of  him  as  he  pranced  through  the 
fields.  In  other  words,  railway  legislation  in  the 
United  States  is  full  of  inconsistencies  and 
anomalies,  spasmodic  expressions  of  legislative 
impulses,  and  the  futile  attempts  of  adminis- 
trative bunglers. 

7 


RAILWAY    LEGISLATION 

On  the  other  hand,  there  is  much  that  is  val- 
uable in  existing  laws.  The  growth  of  decades 
has  produced  many  good  results.  No  one  can 
advance  arguments  adequate  to  justify  the  gen- 
eral repeal  of  existing  laws  and  a  substitution 
therefore  of  laws  thought  to  be  better.  Amend- 
ments with  a  reconstruction  of  parts  is  probably 
a  prudent  rule.  New  conditions  require  new 
rules.  Laws  which  were  but  poorly  fitted  to 
meet  former  conditions  are  much  less  adapted  to 
meet  the  changed  conditions  of  to-day. 

Starting  with  England  as  the  original  area  of 
diffusion,  railway  charters  were  carried  into  every 
quarter  of  the  globe.  The  first  that  were  landed 
on  this  side  of  the  Atlantic  bore  close  resem- 
blances to  their  prototypes  in  the  British  Isles. 
Then,  as  they  were  carried  westward,  the  care- 
fulness of  their  construction  and  the  comprehen- 
siveness of  their  scope  diminished  as  the  distance 
from  the  Atlantic  increased.  The  march  across 
the  continent  consumed  less  than  five  decades, 
ending  with  the  later  sixties.  Among  the  char- 
ters granted  in  Eastern  States  there  are  many 
which  are  relatively  complete.  In  New  England 
and  in  the  Middle  States  there  is  little  of  that 
mutilation  which  characterizes  the  construction  of 
charters  farther  west.  In  the  West,  charters  fre- 
quently show  great  recklessness  in  their  con- 
struction and  enactment.  Railways  everywhere 
involve  certain  common  matters  of  public  and 
private  interest.  These  common  matters  would 

8 


CHARACTERISTICS 

logically  find  their  expression  in  common  charter 
provisions.  Such,  however,  is  not  the  case.  Gen- 
erally speaking,  the  differences  among  railway 
charters  are  far  greater  than  their  similarities. 
These  differences,  furthermore,  are  not  found 
chiefly  in  charters  granted  to  railways  running 
through  territories  which  differ  in  topography, 
where  differences  would  be  warranted,  but  they 
are  found  in  charters  granted  for  the  construction 
of  railways  through  the  same  or  essentially  simi- 
lar territory.  The  number  of  points  treated  in 
charters  varies  from  about  a  dozen  to  more  than 
forty.  In  a  very  small  number  of  cases  charters 
are  even  more  fragmentary.  The  fragmentary 
charter  may  have  been  granted  for  an  important 
railway,  and  the  complete  charter  for  a  railway  of 
local  significance.  The  perfection  of  the  charter 
and  the  importance  of  the  railway  do  not  generally 
travel  in  the  same  direction. 

Railway  charters  are  private,  local,  or  special 
laws.  Originally  these  were  the  only  laws  relating 
to  railways  found  on  our  statute  books,  although 
in  a  single  instance  reference  was  made  in  a 
charter  to  a  general  law  granted  as  early  as  1808. 
This  was  an  exception  to  a  rule  which  was  ex- 
ceedingly general.  In  a  number  of  states  legis- 
lators apparently  sought  to  lighten  their  labors 
by  abbreviating  charters.  Charters  were  granted 
containing  a  few  clauses  relating  to  purely  local 
and  individual  matters,  followed  by  a  blanket  pro- 
vision to  the  effect  that  the  company  thereby 

9 


RAILWAY    LEGISLATION 

incorporated  shall  enjoy  all  the  rights  and  privi- 
leges previously  granted  to  a  certain  other  railway 
company.  This  practice  led  to  greater  uniformity 
in  the  contents  of  charters  and  was  one  of  the 
factors  which  encouraged  the  enactment  of  gen- 
eral laws  relating  to  all  railways  within  the  com- 
monwealth in  which  such  laws  were  enacted. 
The  early  general  laws  usually  related  to  some 
specific  point;  such  as  sign  boards,  fences,  right 
of  way,  and  the  ringing  of  bells.  Gradually  the 
scope  of  the  general  laws  was  extended,  until 
finally  they  embraced  all  the  provisions  of  the 
best  private  charters  and  became  general  laws  for 
incorporation  of  railway  companies.  These  gen- 
eral laws  were  frequently  made  a  part  of  the 
general  laws  on  corporations,  although  in  many 
instances  they  have  been  kept  separate  to  the 
present  time.  In  fact,  the  latter  appears  to  be 
the  prevailing  tendency.  This  is  a  commendable 
feature  of  contemporary  railway  history,  for  rail- 
ways have  so  many  peculiarities  of  their  own  that 
separate  treatment  of  them  in  our  laws  is  likely 
to  result  in  better  adjustments  and  less  friction. 

Having  placed  general  railway  laws  upon  the 
statute  books,  it  would  seem  that  the  era  of  special 
charters  had  come  to  a  close  in  the  state  for  which 
the  general  law  had  been  enacted.  But  such  is 
not  the  case.  Almost  numberless  instances  could 
be  cited  in  which  special  charters  were  granted 
without  the  least  reference  to  the  general  law  pre- 
viously enacted.  In  some  cases  the  special  charters 

10 


CHARACTERISTICS 

were  granted  within  incredibly  short  periods  of 
time  after  the  passage  of  the  general  law.  What- 
ever else  this  may  show,  it  reveals  loose  methods 
and  carelessness  in  administration.  Yet  in  spite 
of  these  slips  and  gaps,  general  legislation  made 
steady  gains,  so  that  by  about  1870  the  era  of 
special  legislation  may  be  said  to  have  been  passed. 
In  the  East  it  had  been  passed  in  most  respects 
by  about  1850.  General  legislation  has  obvious 
advantages  over  special  legislation,  in  that  it  treats 
all  railways  alike  and  formulates  a  general  policy 
in  the  observance  of  which  the  railways  and  the 
state  are  much  more  likely  to  get  together.  There 
exists  greater  similarity  among  successive  general 
laws  in  a  state  than  among  successive  charters 
granted  by  the  same  state ;  but  among  the  general 
laws  of  different  states  the  differences  are  fre- 
quently as  great  as  among  the  special  charters. 
These  differences  among  the  laws  of  different 
states  are  significant,  especially  from  the  point 
of  view  of  a  railway  company  whose  system  lies 
in  different  states.  A  railway  system  should  be 
operated  as  a  unified  network.  This  is  demanded 
alike  by  public  and  private  interests.  But  how 
can  the  best  results  be  obtained  if  the  same  system 
of  railways  is  subjected  to  varying  antagonistic  or 
mutually  exclusive  provisions  of  law  ?  This  state 
of  affairs  must  necessarily  create  dissatisfaction 
among  both  parties.  Greater  uniformity  in  the 
railway  laws  of  the  states  is  imperative.  If  this 
cannot  be  accomplished,  a  wider  scope  of  federal 

ii 


RAILWAY    LEGISLATION 

legislation  suggests  itself  as  a  feasible  solution. 
There  can  be  no  excuse  for  widely  different  meth- 
ods of  classification  and  rate  schedules  when  the 
same  commodities  are  concerned  ;  nor  should  a 
multiplicity  of  reports  be  called  for.  A  uniform 
rule  of  assessment  and  taxation  is  unquestionably 
desirable. 

Railway  legislation  in  the  United  States  lacks 
adjustment,  the  machinery  for  making  adjust- 
ments, and  the  machinery  for  administering  with 
efficiency  the  laws  supposed  to  be  in  force.  The 
railway  business  is  complex.  It  ministers  to  mani- 
fold wants.  It  has  many  interests.  The  law 
should  somewhere  delegate  power  which  can  be 
exercised  with  discretion  by  authorized  administra- 
tive agents,  rather  than  prescribe  rigid  rules  for 
traffic  matters  which  may  require  one  type  of 
decision  to-day  and  the  opposite  type  to-morrow. 
The  easiest  and  perhaps  the  best  way  of  providing 
the  elements  of  elasticity  and  adjustment,  which  are 
now  so  generally  lacking,  is  to  invest  a  competent 
authority  with  ample  discretionary  powers. 

The  lack  of  elasticity  in  railway  legislation  is 
also  illustrated  by  the  many  constitutional  provi- 
sions which  have  been  incorporated  in  the  con- 
stitutions of  various  states.  The  chapter  on 
Constitutional  Provisions  illustrates  this.  There  are 
certain  general  and  fundamental  principles  which 
.  can  perhaps  be  incorporated  in  constitutions  to  ad- 
vantage; such  as,  eminent  domain,  publicity,  and 
equality  of  treatment.  But  rigid  provisions  relat- 

12 


CHARACTERISTICS 

ing  to  the  long  and  short  haul,  discriminations,  and 
classification  are  likely  to  hinder  that  free  develop- 
ment of  traffic  arrangements  which  the  railway 
business  requires.  There  are  circumstances  under 
which  a  greater  charge  for  a  shorter  haul,  over 
the  same  line,  in  the  same  direction  is  justifiable 
and  necessary.  There  are  discriminations  which 
are  not  unjust.  State  classifications,  unless  they 
arfc  essentially  alike,  if  not  identical,  except  in 
matters  of  commodity  tariffs,  are  likely  to  obstruct 
progress  toward  a  uniform  national  classification. 
Constitutional  amendments  are  not  easy  to  secure, 
and  the  less  our  constitutions  are  concerned  with 
such  changeable  matters,  the  better  will  schemes  of 
public  regulation  achieve  their  ends. 


CHAPTER   III 

FOREIGN  SIDE-LIGHTS  l 

IN  these  times  of  commercial  expansion  and  the 
establishment  of  more  far-reaching  and  complex 
international  relations  a  survey  of  foreign  experi- 
ence is  especially  appropriate.  The  railway  as  an 
institution  is  everywhere  the  same.  As  an  indus- 
try it  presents  characteristics  which  are  in  many 
respects  different  from  those  common  to  other 
industries.  These  peculiarities  of  the  railway 
business  have  been  so  often  pointed  out  that  it  is 
not  necessary  to  repeat  them  here.  Railway  legis- 
lation, like  legislation  in  other  domains  of  the 
industrial  world,  must  bear  definite  relations  to 
the  business  treated  in  such  laws,  and  the  fact 
being  indisputable  that  the  intrinsic  nature  of  rail- 
way enterprise  is  everywhere  the  same,  the  corol- 
lary must  go  unchallenged  that  railway  legislation 
must,  in  its  essential  features,  bear  a  correspond- 
ing degree  of  similarity  and  identity.  It  is  only 
in  secondary  and  local  characteristics  that  we  find 
differences  of  importance  in  a  study  of  the  railways 
of  different  countries ;  hence  it  follows  that  only  in 

1  Consult  Part  V  of  the  author's  "  Report  on  Railway  Regula- 
tion," United  States  Industrial  Commission  Reports,  Vol.  IX,  p.  943. 

14 


FOREIGN    SIDE-LIGHTS 

such  secondary  matters  should  laws  aiming  at 
the  control  of  railways  differ  in  the  substantial  ele- 
ments of  their  contents.  The  experiences  of  for- 
eign countries  have  frequently  been  brushed  aside 
on  the  assumption  that  whatever  success  or  failure 
may  have  characterized  foreign  effort,  nothing  of 
vital  importance  to  American  states  could  possibly 
be  discerned  therein  because  of  differences  in  con- 
ditions which,  it  is  alleged,  exist  between  the 
United  States  and  the  respective  foreign  coun- 
tries. No  one  will  be  inclined  to  deny  that  cer- 
tain important  differences  do  exist,  but  the  position 
can  be  successfully  maintained  that,  so  far  as  rail- 
ways are  concerned,  these  differences  do  not,  as  a 
rule,  touch  upon  the  essential  features  of  the  rail- 
way problem,  and  that  along  the  large  lines  of 
industrial  growth  and  development  every  impor- 
tant modern  nation  is  cosmopolitan ;  that  is,  mod- 
ern social  and  economic  conditions  have  the 
world  over  become  more  and  more  alike,  and,  as 
this  similarity  increases,  the  need  for  similar  legis- 
lation in  all  the  different  countries  becomes  in- 
creasingly urgent. 

Railway  charters  —  using  this  term  in  the  sense 
of  special  legislation,  as  well  as  grants  of  railway 
charters  under  general  laws  —  are  essentially  alike 
the  world  over  so  far  as  the  great  nations  are  con- 
cerned. In  all  the  different  countries  railway 
charters  bear  upon  them  the  marks  of  lineal  de- 
scent from  early  English  charters,  which  in  turn 
were  copied  directly  from  the  charters  granted  to 


RAILWAY    LEGISLATION 

canal  and  road  companies.  This  similarity  be- 
tween railway  and  macadam  or  plank  road  char- 
ters can  be  readily  detected  in  our  laws.  Many 
common  road  charters  are  identical  in  language 
with  contemporary  railway  charters,  the  only  dif- 
ferences lying  in  a  few  things  peculiar  to  road 
companies,  such  as  the  smaller  size  of  shares,  pro- 
visions on  toll  gates,  the  use  of  the  road  by 
drovers,  etc.  Were  one  to  take  out  of  a  railway 
charter  and  a  common  road  charter  clauses  relat- 
ing directly  to  these  topics,  it  would  probably  be 
impossible  to  determine  whether  a  certain  charter 
had  originally  been  granted  to  a  common  road  or 
a  railway  company.  Certain  archaic  features  which 
were  embodied  in  the  Liverpool-Manchester  char- 
ter may  be  discerned  in  charters  of  different  states 
in  the  United  States,  as  well  as  in  those  of  foreign 
countries.  One  of  the  most  common  of  these  is 
the  right  of  different  shippers  to  use  the  same 
track.  One  of  the  most  serious  objections  brought 
against  some  of  the  early  railway  projects  was  the 
impossibility  of  using  ordinary  coaches  and  vehi- 
cles in  the  transportation  of  persons  and  property 
over  railways.  Inventors  during  the  earlier 
decades  of  the  nineteenth  century  devised  con- 
trivances by  which  carriages  could  be  used  on  both 
common  and  rail  roads.  These  provisions  were 
inserted  in  some  cases  for  the  purpose  of  reserving 
to  the  state  certain  rights  which  it  might  other- 
wise find  difficult  to  assert.  It  was  thought  that , 
the  state,  or  a  person  or  persons  authorized  to  do 

16 


FOREIGN    SIDE-LIGHTS 

so  by  the  state,  could  become  active  competitors 
over  the  same  tracks,  and  thus  enforce  rules  of 
justice.  The  fallacy  of  this  theory  was  soon  dis- 
covered, but  the  archaic  clauses  continued  to  find 
their  way  into  charters. 

Several  years  ago  a  distinguished  jurist  stated  in 
a  public  address  that  in  Europe  railways  had  been 
constructed  in  the  beginning  by  public  capital, 
while  in  the  United  States  they  had  been  built  by 
private  capital.  Reference  is  here  made  to  this 
address  simply  because  it  illustrates  the  prevalence 
of  certain  erroneous  theories  even  among  dis- 
tinguished men.  As  a  matter  of  fact  the  exact 
reverse  is  more  nearly  true.  With  the  exception 
of  a  few  short  lines,  every  railway  of  Europe,  dur- 
ing the  early  decades  of  railway  history,  was  con- 
structed by  private  capital;  while  in  the  United 
States  the  first  railways  were  generally  built  to  a 
greater  or  less  extent  by  public  funds  contributed 
in  the  form  of  land  grants  or  subscriptions  and 
bonuses  from  towns,  counties,  cities,  states,  and 
the  federal  government.  The  appeal  to  this 
alleged  difference  in  the  sources  of  railway  funds 
in  Europe  and  the  United  States  is  usually  made 
for  the  purpose  of  explaining  existing  differences 
in  methods  of  regulation  and  administration.  Since 
this  difference  in  the  origin  of  funds  does  not  exist, 
it  cannot  explain  facts ;  but  even  if  it  did  exist,  it 
could  not  be  made  to  explain  the  facts  for  which  it 
is  said  to  be  the  touchstone. 

European  countries  resorted  to  special  legisla- 
c  17 


RAILWAY   LEGISLATION 

tion  to  a  much  smaller  extent.  A  few  private 
charters  were  usually  first  granted,  after  which 
incorporation  was  by  general  law.  But  the  first 
private  or  special  charters  were  subjected  to  the 
most  rigid  examination  and  public  hearings  and 
discussions.  In  these  examinations,  hearings,  and 
discussions  we  find  the  origin  of  ideas  and  points 
of  view  which  were  later  incorporated  in  general 
laws.  The  relative  promptness  and  thoroughness 
with  which  European  countries  legislated  upon 
railway  subjects  saved  them  from  some  of  the 
excesses  of  the  evils  from  which  we  have  suffered. 
There  are  probably  few  if  any  abuses  connected 
with  railways  which  did  not  manifest  themselves 
there,  but  these  never  gained  such  headway,  be- 
cause of  the  greater  care  and  thoroughness  exer- 
cised in  remedial  and  preventive  legislation. 

Excepting  taxation,  there  is  practically  no  sub- 
ject relating  to  railways  with  reference  to  which 
laws  have  been  enacted  which  is  not  treated  the 
same  way  in  the  law,  whether  it  applies  to  an 
important  trunk  line  or  to  a  relatively  unimpor- 
tant local  road.  In  other  words,  our  laws  do  not 
recognize  differences  in  the  relative  importance  of 
railways.  In  the  state  of  Wisconsin,  for  instance, 
there  are  two  great  systems  which  have  a  large 
mileage  in  the  state,  and  several  other  great  sys- 
tems have  branches  within  its  borders.  These 
railways  clearly  belong  to  the  first  class.  Then 
there  are  several  railways  extending  through  the 
state,  but  going  little  or  no  farther.  These  consti- 

18 


FOREIGN    SIDE-LIGHTS 

tute  a  second  class.  A  third  class  is  represented 
by  a  number  of  railways  which  have  an  autono- 
mous existence,  but  which  serve  primarily  as  feed- 
ers for  the  largest  systems.  Ore  and  lumber 
railways,  devoted  solely  to  the  transportation  of 
commodities  for  their  proprietors,  constitute  a 
fourth  class.  And  for  the  sake  of  completeness 
private  branches  and  switch  lines  may  be  added  as 
a  fifth  class.  It  requires  no  lengthy  argument  to 
show  that  the  greatest  differences  exist  with  re- 
spect to  the  relative  degrees  of  importance  repre- 
sented by  these  five  classes  of  railways ;  and  while 
a  single  general  law  may  advantageously  cover 
provisions  on  points  common  to  all  these  railways, 
additional  legislation  should  be  formulated  for  each 
separate  class  of  railways.  It  seems  highly  inex- 
pedient to  attempt  to  regulate  a  great  interstate 
system  by  means  of  the  same  laws  which  are  fitted 
to  a  purely  local  line,  and  vice  versa. 

Next  to  the  United  States,  England  comes 
nearest  to  not  having  a  legal  classification.  An 
English  law  of  1868  imposes  less  onerous  duties 
upon  "  light  railways,"  which  are  confined  to  a  low 
maximum  speed  and  a  low  maximum  burden  per 
axle.  Prussia  has  from  the  first  recognized  pri- 
mary and  secondary  railways;  but  not  until  1892 
were  narrow-gauge  and  other  local  railways  in- 
cluded in  the  term  "  railway  "  at  all.  French  law 
formally  recognizes  only  two  classes,  but  a  very 
rigid  administrative  division  of  the  first  class  into 
two  subclasses  really  creates  a  third  class  of 

19 


RAILWAY    LEGISLATION 

roads.  These  three  classes  are,  the  primary  net- 
work of  railways  of  general  interest,  the  secondary 
network  of  railways  of  general  interest,  and  rail- 
ways of  local  interest.  The  particular  class  to 
which  a  railway  shall  belong  depends  upon  the 
place  which  is  assigned  to  it  by  the  authorities  of 
tlj$  state  in  the  "declaration  of  public  utility." 
Belgium  recognizes  three  classes,  —  railways  of 
*  general  interest,  parochial,  and  urban  railways. 
In  Holland  three  classes  also  exist,  —  primary,  sec- 
ondary, and  regional.  The  Austrian  and  Hun- 
garian classifications  are  essentially  like  that  of 
Prussia,  including  main  and  local  roads.  The 
Italian  law  of  1879  distinguishes  between  four 
classes,  based  upon  the  proportion  of  the  total  cost 
of  the  railways  borne  respectively  by  the  federal 
government  and  by  subordinate  political  unities. 
Secondary  Italian  railways  are  divided  into  five 
classes,  depending  upon  the  width  of  tracks,  speed, 
curves,  grades,  etc. 

The  convenience  of  classifications  of  this  kind  is 
apparent;  and,  furthermore,  such  classifications 
are  in  themselves  a  recognition  of  varying  degrees 
of  importance  attached  to  different  kinds  of  rail- 
ways. Under  the  laws  of  the  different  states  in 
the  Union,  a  short  and  insignificant  road  in  an 
isolated  corner  of  the  state  is  governed  by  the 
same  laws  through  which  an  attempt  is  made  to 
control  and  regulate  the  most  extensive  system 
embracing  thousands  of  miles  of  double,  triple,  and 
quadruple  tracks.  Along  this  line  foreign  legisla- 

20 


FOREIGN    SIDE-LIGHTS 

tion  may  teach  us  a  valuable  lesson  in  that  it  points 
out  the  imperative  necessity  of  recognizing  in  the 
law  decisive  differences  in  the  social  and  economic 
importance  of  different  railway  systems. 

Dogmatic  adherence  to  the  doctrine  of  free  and 
unrestrained  competition  among  railways  is  not  a 
chief  characteristic  of  foreign  railway  history.  In 
England,  Germany,  France,  and  Austria,  the  limi- 
tations of  competition  were  recognized  in  the  delib- 
erations accompanying  the  granting  of  the  first 
charters.  The  construction  of  "  competitive  "  lines 
within  certain  periods  of  time  was  usually  pro- 
hibited. Railways  were  recognized  as  undertak- 
ings which  possess  characteristics  differing  widely 
from  ordinary  industrial  enterprises.  A  British 
Parliamentary  committee  of  1872  reported  that 
"competition  between  railways  exists  only  to  a 
limited  extent,  and  cannot  be  maintained  by  legis- 
lation," and  that ""  combination  between  railway 
companies  is  increasing,  and  is  likely  to  increase, 
whether  by  amalgamation  or  otherwise.'*  In 
France  there  were  thirty-three  railway  companies 
in  1846;  in  1855,  there  were  twenty-four;  in  1857, 
eleven;  and  in  1859,  excepting  eight  subordinate 
lines,  only  six  companies  were  left.  These  six  con- 
stitute the  great  French  railway  companies  of 
to-day,  among  whom  the  territory  of  France  is 
parcelled  out,  each  company  enjoying  exclusive 
privileges  within  its  respective  domains.  For  years 
Austrian  railways  have  exercised  the  privilege  of 
making  traffic  arrangements  analogous  to  Ameri- 


RAILWAY    LEGISLATION 

can  "pools,"  and  in  the  countries  of  Germany 
railway  federation  is  in  progress  to-day.  Germany 
repudiated  the  doctrine  of  free  competition  before 
the  era  of  nationalization  had  begun.  Japan  has 
adopted  a  unique  compromise  measure  for  the 
granting  of  charters  by  dividing  the  franchise  to  a 
company  into  three  parts.  The  first  part  is  a  pre- 
liminary charter  which  authorizes  persons  to  make 
surveys  and  to  submit  to  the  government  estimates 
and  propositions  for  construction.  During  this 
stage  no  subscriptions  to  stock  can  be  received,  nor 
can  any  work  of  construction  be  begun.  Different 
parties  may  compete  for  the  second  part  of  the 
franchise  or  construction  charter.  The  first  charter 
is  temporary  ;  the  second  is  permanent.  The  con- 
struction charter  authorizes  the  company,  now  a 
legal  body,  to  build  the  railway  within  the  limits 
of  the  general  railway  law.  When  trie  company 
desires  to  open  a  part  or  the  whole  of  the  road  for 
traffic,  a  communication  must  be  addressed  to  the 
head  of  the  national  or  central  railway  department, 
now  the  department  of  communication.  The  de- 
partment of  communication,  having  received  such 
notice  of  the  intention  of  the  company  to  open  its 
new  line  to  traffic,  shall  order  an  inspection  of  the 
road,  with  respect  of  gauge,  bridges,  rolling  stock, 
buildings,  etc.,  in  accordance  with  the  provisions 
of  the  "estimation."  If  the  inspection  is  satisfac- 
tory, then  a  business  charter  or  "grant  to  begin 
business"  is  given  to  the  company.  This  charter 
finally  authorizes  the  corporation  to  do  business. 

22 


FOREIGN    SIDE-LIGHTS 

One  of  the  leading  considerations  in  the  granting 
of  charters  for  the  construction  of  new  lines  under 
the  Prussian  law  of  1838  is  the  economic  necessity 
of  the  projected  road  and  its  probable  influence  on 
existing  railways.  This  has  been  one  of  the  fun- 
damental principles  in  Prussian  administration  that 
no  new  railway  shall  be  built  where  it  is  not  needed, 
or  where  it  may  do  serious  injury  to  an  existing  or 
previously  chartered  railway.  Japan  is  pursuing 
a  similar  course  by  rejecting  applications  for  char- 
ters, when  the  necessity  for  the  construction  of  the 
new  railway  cannot  be  fully  demonstrated,  or  when 
it  prejudices  the  just  interests  of  existing  lines. 
In  these  respects  American  laws  are  lamentably 
weak.  Our  fallacious  theories  of  unrestricted  com- 
petition have  led  to  the  construction  of  duplicate 
lines  for  purposes  of  blackmail,  and  the  destruction 
of  valuable  properties  through  the  recklessness 
with  which  charters  have  been  granted. 

In  the  Code  of  Per  Diem  Rules1  adopted  by  the 
American  Railway  Association,  the  first  page  is 
devoted  to  definitions.  Terms  like  "home  car," 
"private  car,"  "home,"  "home  route,"  are  care- 
fully defined.  We  look  in  vain  for  a  similar  set  of 
definitions  of  terms  used  in  railway  laws  in  the 
United  States.2  Neither  the  interstate  commerce 
law  nor  the  laws  of  the  states  contain  adequate 

1  J.  W.  Midgley,  Code  of  Per  Diem  Rules,  1902. 

2  The  laws  of  Massachusetts  contain  quite  a  number  of  definitions, 
and  the  terms  employed  in  the  statistics  of  the  Interstate  Commerce 
Commission  are  carefully  defined  in  the  official  report  blanks. 

23 


RAILWAY    LEGISLATION 

definitions  of  terms  like  "railway,"  "through  traffic/' 
and  "proportional  rates."  It  may  be  a  difficult 
matter  to  formulate  accurate  definitions  of  tech- 
nical terms  employed  in  matters  relating  to  railway 
traffic,  yet  for  the  sake  of  clearness  and  uni- 
formity definitions  should  be  incorporated  in  our 
laws.  At  present  such  definitions  are  found  only 
incidentally  in  decisions  of  courts  and  of  commis- 
sions. In  the  laws  of  England  and  of  British 
colonies,  on  the  other  hand,  the  custom  of  defining 
the  terms  employed  in  the  laws  appears  to  be  well 
established.  The  Canadian  law,  for  instance,  de- 
fines such  terms  as  "  company,"  "  court,"  "  depart- 
ment," "goods,"  "highway,"  "lines,"  "map  or 
plans,"  "near,"  "owner,"  "railway,"  "toll,"  "tariff," 
"the  undertaking,"  and  "working  expenditure/' 
Compared  with  the  United  States,  European 
countries  were  rather  slow  in  expanding  their  rail- 
way systems  during  earlier  epochs.  This  difference 
in  the  rapidity  with  which  railways  were  projected 
and  constructed  on  the  two  continents  may  be  ex- 
plained, partly,  first,  by  the  more  highly  developed 
systems  of  macadam  roads  and  canals  which  suf- 
ficed fairly  well  to  meet  the  needs  of  commerce ; 
and,  second,  by  the  more  buoyant  and  speculative 
temper  which  prevailed  in  the  United  States,  to- 
gether with  the  absence  of  good  roads  and  canals 
and  the  necessity  of  finding  means  for  transporting 
her  rapidily  growing  surplus  to  market.  Germany, 
for  instance,  had  a  well-organized  stage-coach  sys- 
tem operating  on  her  fine  highways.  Her  canals 

24 


FOREIGN    SIDE-LIGHTS 

and  rivers  assisted  in  caring  for  her  commerce, 
which  was  just  beginning  to  develop  at  the  open- 
ing of  the  railway  era.  These  conditions  also 
explain,  in  part  at  least,  the  greater  deliberation 
with  which  Germany  proceeded,  and  afforded  bet- 
ter opportunities  for  the  state  to  exercise  its  pre- 
rogatives and  reserve  rights  and  privileges  which 
have  proved  to  be  valuable.  In  the  United  States, 
on  the  other  hand,  the  need  for  transportation 
facilities  was  imperative,  and  the  history  of  in- 
ternal improvements  aided  in  throwing  the  task 
of  providing  these  facilities  into  private  hands. 
Newspaper  articles  and  public  discussions  during 
the  thirties  and  forties  bear  witness  to  the  fact  that 
the  relative  merits  of  public  and  private  ownership 
were  brought  before  the  public  fairly  well  at  that 
time.  But  the  logic  of  events  was  against  the 
assumption  of  such  duties  by  the  state.  The 
national  system  of  internal  improvements l  was 
inaugurated  by  Jefferson,  in  1806,  in  the  Cumber- 
land Road  law.  Under  the  influence  of  growing 
nationalism  it  was  vigorously  discussed  and  tempo- 
rarily checked  in  the  Bonus  bill  of  1816-17.  The 
constitutional  phase  of  the  discussion  received  a 
hopeful  impulse  toward  a  solution,  in  the  attempt 
to  separate  the  questions  of  constitutionality  and  of 
expediency,  in  the  long  debates  of  1818-19.  The 
failure  of  the  Cumberland  Road  bill  of  1822,  and 
President  Monroe's  scholarly  letter,  drew  into  ques- 

1  Meyer,  A  History  of  Early  Railroad  Legislation  in  Wisconsin. 
Wisconsin  Historical  Collection  (1898),  Vol.  XIV,  pp.  229-234. 

25 


RAILWAY    LEGISLATION 

tion  with  renewed  vigor  the  constitutionality  of  the 
system.  All  the  old  ground  was  torn  up,  and  no 
phase  of  the  question  left  untouched,  in  the  pro- 
tracted debates  of  1824.  During  the  administration 
of  J.  Q.  Adams,  the  idea  of  a  system  of  internal 
improvements  was  once  more  brought  prominently 
before  the  public,  and  in  the  Maysville  Road  veto 
(1830)  it  received  its  death-blow  at  the  hands  of 
Jackson.  This  marks  the  downfall  of  a  national 
system  of  internal  improvements.  While  the  na- 
tional government  still  continues  to  make  appropria- 
tions, all  hopes  of  establishing  a  system  of  internal 
improvements  by  direct  federal  agency — and  from 
which  the  federal  government  might  derive  reve- 
nue—  were  abandoned  in  1830.  Jackson's  deter- 
mination to  free  the  nation  from  debt,  and  to 
adhere  to  principles  of  strict  economy,  and  his 
uncompromising  hostility  to  corporate  "  monsters," 
were  the  forces  which  dealt  the  fatal  blow.  The 
new  democracy,  whose  banner  Jackson  had  hoisted, 
adopted  politics  of  great  geographical  dimensions. 
Expansion  was  its  war-cry.  The  schemes  which 
were  born  in  this  atmosphere  bore  on  them  the 
stamp  of  the  wide  plains  stretching  far  beyond  the 
dim  horizon,  and  of  the  great  streams  and  forests 
which  the  new-born  "  nation "  possessed.  The 
geography  of  the  country  had  become  the  main- 
spring of  the  human  mind. 

The  argument,  in  brief,  was  this :  Internal  im- 
provements are  a  necessity.  The  federal  govern- 
ment cannot  undertake  them.  Therefore,  since 

26 


FOREIGN    SIDE-LIGHTS 

something  must  be  done,  the  states  must  impose 
upon  themselves  this  important  duty.  The  increas- 
ing activity  of  the  states  in  undertaking  works  of 
internal  improvement  was  a  characteristic  of  the 
period  from  1830  to  1837.  The  unparalleled  suc- 
cess of  the  Erie  Canal  was  something  which  every 
state  thought  itself  capable  of  repeating  in  its  own 
projects.  We  need  but  recall  Jackson's  war  on 
the  United  States  Bank,  the  pet  banks,  paper 
money,  land  bills,  the  distribution  of  the  surplus, 
and  the  specie  circulars,  in  order  to  bring  vividly 
before  us  the  sequences  of  the  internal  improve- 
ments and  general  speculative  mania.  We  are 
told  that  the  Michigan  legislature  had  "projected 
one  mile  of  improvement  for  every  150  of  the  in- 
habitants, which,  upon  common  averages,  gives  one 
mile  for  every  thirty  votes,"  and  that  the  state 
had  contracted  an  indebtedness  of  $200,000,000 
"  unsecured  by  any  property  adequate  to  the  sup- 
port of  such  a  burden."  l  The  atmosphere  which 
had  once  been  the  nursery  of  gigantic  projects  had 
now  become  close  and  oppressive,  not  only  to 
citizens  of  our  own  country,  but  to  foreigners  who 
had  sunk  many  a  fine  sovereign  in  the  credit  of 
the  states. 

The  country  now  entered  upon  a  period  of  state 
repudiation,  national  discredit,  and  the  agitation  of 
federal  assumption.2  The  state  governments  had 
tried  to  do  what  was  abandoned  by  the  federal 

1  H.  C.  Adams,  Public  Debts  (N.Y.  1887),  p.  336. 

2  Scott,  Repudiation  of  State  Debts,  (N.Y.  1893). 

27 


RAILWAY    LEGISLATION 

government  in  1830,  and  in  the  attempt  had  fallen 
into  disrepute.  The  pressure  for  improvements 
became  stronger  as  the  country  developed.  Their 
construction  had  been  taken  out  of  the  hands  of 
the  federal  government.  The  state  governments 
had  failed.  And  now  there  was  but  one  alterna- 
tive, —  not  to  build  them  at  all,  or  to  leave  internal 
improvements  to  private  corporations.  The  latter 
policy  was  chosen.  Jackson's  " monster"  had 
now  gained  the  ascendency.  The  period  following 
1837  marks  the  decline  of  the  states  as  economic 
agents  and  the  rise  of  private  corporations.  Con- 
sidering the  temper  of  the  American  people  and 
the  prevailing  industrial  conditions,  this  issue  was 
probably  the  best  under  the  circumstances,  although 
the  gross  disregard  of  public  rights  connected  with 
the  history  of  many  railway  companies  will  always 
remain  a  blot  in  our  industrial  evolution.  It 
resulted  in  a  certain  drifting  apart  of  public  and 
private  interests,  while  the  memory  of  early  abuses 
seems  ever  ready  to  stimulate  drastic  legislation. 


28 


CHAPTER   IV 

ECONOMIC    ADJUSTMENTS1 

IN  the  opening  sentence  of  the  first  chapter  it 
was  said  that  the  world  was  born  again  with  the 
introduction  of  railways.  Many  changes  in  indus- 
trial, commercial,  social,  and  political  relations 
followed,  and  have  continued  to  come,  so  that 
every  succeeding  day  brings  us  a  new  world  with 
its  changed  relations,  calling  for  continual  read- 
justment to  these  new  conditions.  In  this  process 
of  readjustment  there  takes  place,  a  conflict  of 
diverse  and  antagonistic  interests,  the  weaker  or 
less  important  yielding  to  the  stronger  or  more 
important.  The  assertion  that  the  interests  of  the 
railways  and  of  the  public  are  harmonious  and 
identical  cannot  prevent  conflicts,  for  neither  the 
entire  public  nor  every  railway  manager  will  view 
the  situation  in  this  light.  There  certainly  exist 
elements  of  harmony  in  the  interests  represented 
by  the  railways  on  the  one  hand  and  by  the  public 
on  the  other.  For  instance,  a  railway  company 
extends  its  system  into  new  and  remote  territory, 
thereby  increasing  the  value  of  the  lands  and  other 

1The  contents  of  this  chapter  appeared  in  the  Annals  of  the 
American  Academy  of  Political  and  Social  Science  for  January,  1902, 
under  the  head  of  "  Advisory  Councils  in  Railway  Administration." 

29 


RAILWAY    LEGISLATION 

property  in  that  territory.  A  new  source  of  sup- 
ply has  been  tapped  and  the  traffic  of  the  road  is 
proportionately  increased.  With  the  increase  in 
traffic  and  the  rise  in  value  of  other  property  in 
that  territory  the  railway  property  becomes  more 
valuable,  and  thus  increases  the  sources  of  public 
revenue.  Up  to  this  point  there  exists  harmony ; 
but  the  possibilities  of  a  conflict  of  interests  must 
not  be  overlooked.  The  railway  property  hav- 
ing become  very  valuable,  the  authorities  of  the 
state  may  assess  this  property  to  a  degree  which 
the  railway  authorities  regard  excessive;  or  the 
railway  company  may  levy  a  transportation  charge 
which  the  public  considers  excessive,  or  it  may 
give  preferences  to  one  industry  or  place  or 
productive  area  over  another  industry,  place,  or 
area. 

This  lack  of  harmony  between  the  two  great 
parties  may  be  due  to  a  lack  of  mutual  apprecia- 
tion of  each  other's  rights  and  privileges ;  it  may 
be  due  to  ignorance,  to  unscrupulousness,  to  intrin- 
sically irreconcilable  points  of  view,  to  extraneous 
factors  over  which  neither  can  exercise  control,  or 
to  numerous  other  contingencies.  Whatever  the 
cause,  the  possibility  of  a  conflict  usually  exists  in 
those  elements  of  railway  transportation  which  are 
not  embraced  in  that  part  of  the  business  repre- 
senting purely  harmonious  and  identical  interests. 
This  chapter  will  be  devoted  to  suggestions  for 
arriving  at  a  better  understanding  of  questions  in 
dispute  and  for  facilitating  the  exchange  of  views 

30 


ECONOMIC    ADJUSTM^.  _ 

and  conciliation  of  interests  on  the  part  of  all  the 
factors  involved  in  railway  problems. 

Before  entering  upon  a  discussion  of  these  sug- 
gestions, three  propositions  will  be  stated,  which 
the  writer  regards  incontrovertible,  but  which  he 
will  not  discuss  in  this  connection,  although  he  is 
prepared  to  support  them  with  ample  evidence  and 
without  fear  of  successful  contradiction.  These 
propositions  are :  — 

1.  That  the   present   situation   with   respect  to 
railway  affairs  in  the  United  States  is  untenable 
and  indefensible. 

2.  That  the  great  majority  of  the  railway  mana- 
gers   and    other    railway   officials    are    sincerely 
desirous  of    administering,    to   the  best   of    their 
abilities,  the  properties  under  their  control  in  the 
most  efficient  manner,  having  due  regard  for  the 
interests  of  both  the  stockholders  and  the  public ; 
but  that  all  the  various  interests  affected  by  their 
action  are  not  represented  in  proportion  to  their 
importance,  if  at  all ;  and  that  consequently  injus- 
tice may  be  done. 

3.  That  there  is  nothing  in  the  present  statutory 
and  administrative  regulation  of  railways  to  pre- 
vent the  arbitrary  and  harmful  action  of  the  weak 
or  unscrupulous  manager  from  defeating  the  desires 
of  the  majority  of  the  officials  who  would  voluntarily 
pursue  a  more  beneficent  course. 

In  the  Annual  Report  for  1898,  the  Interstate 
Commerce  Commission  said :  "  The  situation  has 
become  intolerable,  both  from  the  standpoint  of 


RAILWAY    LEGISLATION 

the  public  and  the  carriers.  Tariffs  are  disre- 
garded, discriminations  constantly  occur,  the  price 
at  which  transportation  can  be  obtained  is  fluctu- 
ating and  uncertain.  Railroad  managers  are  dis- 
trustful of  each  other  and  shippers  all  the  while  in 
doubt  as  to  the  rates  secured  by  their  competitors. 
.  .  .  Enormous  sums  are  spent  in  purchasing 
business  and  secret  rates  accorded  far  below  the 
standard  published  charges.  The  general  public 
gets  little  benefit  from  the  reductions,  for  conces- 
sions are  mainly  confined  to  the  heavier  shippers." 
That  the  situation  here  described  is  as  oppressive 
to  the  railways  as  it  is  odious  to  shippers  no  one 
will  doubt.  In  view  of  this  prevailing  demoraliza- 
tion, the  Commission  called  conferences  with  rail- 
way presidents  during  the  following  year  which 
appear  to  have  accomplished  considerable  good. 
At  a  time  when  published  tariffs  constitute  little 
more  than  "  a  basis  from  which  to  calculate  con- 
cessions and  discriminations "  anything  which  is 
likely  to  assist  in  reestablishing  order  must  be 
approved. 

The  Commission  chose  a  plan  which  is  of  wider 
application  and  which  is  of  importance  in  its  bear- 
ing upon  the  subject  of  advisory  councils  ;  for  what 
were  these  conferences  but  modifications  of  the 
advisory  council  system  ?  In  extending  invitations 
to  officials,  neither  existing  nor  former  railway 
associations  were  taken  into  consideration.  "  The 
selection  in  each  case  was  made  with  reference 
to  the  territory  in  which  different  connecting  and 

32 


ECONOMIC    ADJUSTMENTS 

competing  lines  operate,  and  the  rate  conditions  in 
that  territory,  and  not  with  reference  to  the  rela- 
tions of  the  carriers  through  organized  associations 
or  otherwise."  Nor  were  attempts  made  to  carry 
out  a  system  of  individual  conferences ;  not  only 
because  this  would  consume  much  more  time,  but 
also  and  chiefly  because  "  each  road  in  promising 
to  observe  its  own  tariffs,  and  intending  in  good 
faith  to  keep  that  promise,  needs  the  assurance 
that  its  competitors  will  also  in  good  faith  observe 
their  tariffs."  Mutual  and  concurrent  promises, 
says  the  Commission,  are  necessary  to  secure  con- 
formity to  the  act  to  regulate  commerce.  This  is 
but  another  way  of  expressing  a  part  of  the  third 
proposition  formulated  above.  As  for  practical 
results,  "the  Commission  believes  that  the  pro- 
priety of  holding  these  conferences  has  been  fully 
vindicated  by  the  results  which  have  followed." 
Editorials  in  the  Financial  Chronicle  and  other  lead- 
ing journals  commented  favorably  on  the  probable 
influence  of  these  conferences. 

The  conferences  between  the  Interstate  Com- 
merce Commission  and  railway  officials  represent 
efforts  aiming  primarily  toward  a  better  under- 
standing among  different  railways,  leaving  the 
equally  important  and  larger  question  of  the  rela- 
tion of  the  railways  to  the  great  diversity  of  inter- 
ests in  their  respective  territories  essentially  without 
adequate  expression,  even  if  these  conferences  were 
to  be  made  a  permanent  feature  in  railway  admin- 
istration. Conferences  representing  all  the  varied 
D  33 


RAILWAY    LEGISLATION 

interests  affected  by  railways,  which  means  practi- 
cally the  whole  population,  must  be  provided  for 
before  a  complete  exchange  of  opinions  and  mutual 
understandings  can  be  secured.  The  railways  have 
by  no  means  been  entirely  neglectful  of  this  im- 
portant work.  Special  agents  have  been  sent  out 
by  them  to  make  a  careful  study  of  the  industrial 
and  social  conditions  of  the  territory  through  which 
their  respective  roads  pass,  and  to  "explain  the 
attitude  of  the  railways  and  to  learn  conditions." 
In  Harpers  Magazine  for  February,  1901,  mention 
was  made  of  a  general  freight  agent  who  has  asso- 
ciated with  him  one  hundred  assistants  who  instruct 
and  educate  the  people  in  the  knowledge  that  makes 
for  the  prosperity  of  the  railways  and  of  the  agri- 
cultural and  industrial  classes.  Railways  have  stud- 
ied soils  and  given  instruction  to  farmers  in  stock 
and  grain  raising,  dairying,  gardening,  market  con- 
ditions, and  business  methods.  They  have  main- 
tained a  large  specialized  class  of  employees  to 
assist  in  developing  the  resources  of  the  territory 
through  which  they  run,  and  have  in  this  manner 
increased  appreciably  the  variety,  quantity,  and 
quality  of  the  commodities  shipped  out  of  the  re- 
spective states.  Railways  have  employed  indus- 
trial commissioners,  land  inspectors,  horticultural 
agents,  superintendents  of  dairies,  and  a  host  of 
similar  officers  whose  functions  are  chiefly,  if  not 
solely,  economic  and  social,  and  whose  existence  is 
in  itself  ample  evidence  of  the  necessity  of  provid- 
ing some  means  by  which  the  social  and  economic 

34 


ECONOMIC    ADJUSTMENTS 

interests  of  the  country  can  be  brought  into  close 
and  harmonious  relations  with  the  railways. 

On  the  other  hand,  chambers  of  commerce, 
boards  of  trade,  business  men's  associations,  agri- 
cultural societies,  and  analogous  organizations  have 
maintained  departments,  bureaus,  secretaries,  or 
standing  committees  on  transportation,  with  the 
view  of  guarding  and  promoting  the  interests  of 
their  respective  clienteles,  in  so  far  as  these  may 
be  affected  by  railway  transportation.  Delegates 
and  committees  have  held  conferences  with  rail- 
way managers  and  other  railway  officials.  Res- 
olutions have  been  passed  and  laws  proposed 
looking  toward  a  change  in  the  existing  relations 
between  the  railways  and  these  people.  But  such 
efforts  have  usually  been  one-sided,  emanating 
either  from  the  railways  or  from  the  shipping  pub- 
lic, acting  independently  of  one  another,  with  per- 
haps little  accurate  knowledge  of  each  other's 
points  of  view.  There  exists  no  regularly  consti- 
tuted middle  ground  on  which  the  two  parties  can 
meet  and  deliberate,  on  the  basis  of  authentic 
facts,  and  arrive  at  conclusions  just  and  satisfac- 
tory to  both  and  in  accordance  with  the  needs 
of  the  whole  population,  viewed  in  the  broadest 
possible  light 

Having  seen  that  both  the  railways  and  the  pub- 
lic have  been  feeling  for  each  other,  but  that  an 
uncovered  suture  still  remains  between  them,  the 
writer  ventures  to  suggest  a  plan  which  may  at 
least  serve  as  a  point  of  departure  for  the  discus- 

35 


RAILWAY    LEGISLATION 

sion  of  the  wide  and  momentous  questions  in- 
volved, and  possibly  the  plan  may  embody  ele- 
ments capable  of  elaboration  into  permanent 
arrangements.  It  should  be  understood,  how- 
ever, and  this  the  writer  desires  expressly  to 
emphasize,  that  this  plan  is  suggestive  only,  that  it 
is  not  given  with  dogmatic  assertions  as  to  its  prac- 
ticability, nor  with  the  inference  that  it  is  complete 
and  perpetual.  Many  conferences  will  have  to  be 
held,  numerous  hearings  given,  much  deliberation 
engaged  in,  and  a  multitude  of  facts  considered 
before  a  final  working-plan  can  be  adopted.  The 
.  interests  involved  are  so  enormous,  and  the  possi- 
bilities of  a  conflict  so  great,  that  nothing  but  a 
large,  tolerant,  and  analytically  accurate  view  can 
meet  the  situation. 

The  leading  features  of  the  plan  here  suggested 
are  the  following :  The  establishment  by  law  of  a 
system  of  state  and  interstate  councils,  having 
advisory  power  only,  and  representing  all  the 
various  interests  of  the  entire  population  as  far  as 
practicable.  State  councils  might  be  organized  in 
connection  with  state  railway  commissions,  where 
these  exist,  or  independently  in  those  states  which 
have  no  commissions.  The  size  of  state  councils 
might  vary  with  railway  mileage,  and  the  number 
and  importance  of  the  existing  commercial  and 
agricultural  organizations.  Both  the  elective  and 
the  appointive  principles  might  be  applied,  the 
former  to  insure  representation  and  the  latter  to 
secure  expert  knowledge  and  specialized  efficiency. 

36 


ECONOMIC    ADJUSTMENTS 

The  proportion  of  appointive  to  elective  members 
might  be  made  to  vary  whenever  adequate  reasons 
for  such  variation  are  properly  presented  to  the 
Secretary  of  Commerce  or  other  higher  official, 
although  at  least  three-fourths  of  the  aggregate 
membership  should  perhaps  be  made  elective. 
The  governors  of  the  respective  states  naturally 
suggest  themselves  as  proper  officers,  to  exercise 
the  appointing  power  with  respect  to  state  councils, 
and  the  President  of  the  United  States,  through 
the  Secretary  of  Commerce  and  Labor  for  interstate 
councils.  The  elective  members  should  represent,  in 
addition  to  persons  representing  the  railways,  all  the 
various  state  organizations  which  meet  prescribed 
requirements  existing  within  that  state,  and  which 
have  primarily  intrastate  significance.  Among 
these  societies  may  be  mentioned  boards  of  trade, 
chambers  of  commerce,  exchanges,  business  men's 
associations,  associations  of  lumbermen,  grocers, 
butchers,  foundrymen,  all  the  various  manufac- 
turers, dairymen,  fruit-growers,  agricultural  soci- 
eties, etc.  The  members  to  be  appointed  by 
the  governor  might  be  selected  partly  with  the 
view  of  equalizing  the  representation  of  different 
interests.  No  paid  officials  would  be  necessary,  with 
the  possible  exception  of  a  permanent  secretary, 
who  could  be  attached  to  the  office  of  the  railway 
commission  or  some  other  high  administrative  offi- 
cer. It  would  not  even  be  necessary  to  pay  the 
expenses  of  the  council  out  of  the  public  treasury, 
for  a  small  tax  on  the  organizations  represented, 

37 


RAILWAY    LEGISLATION 

which  their  interests  could  doubtless  well  afford  to 
pay,  would  be  sufficient  to  defray  the  expenses  of 
the  representative.  Certainly  no  salaries  or  per 
diem  rates  ought  to  be  paid  out  of  public  funds 
during  the  formative  period  of  the  councils.  If 
future  development  should  demonstrate  the  desir- 
ability of  payment  to  members,  the  law  could  be 
modified  to  meet  the  situation.  Periodical  meet- 
ings should  be  provided  for,  perhaps  quarterly, 
and  the  interval  of  time  between  the  meeting  of 
state  and  interstate  councils  should  be  sufficiently 
long  to  enable  the  latter  to  review  thoroughly  the 
proceedings  and  recommendations  of  the  former. 
All  meetings  should  be  public  and  the  proceedings 
printed. 

The  territorial  basis  of  interstate  councils  is  not 
so  easily  defined,  because  of  the  different  things 
which  may  be  regarded  as  fundamental  in  such  a 
division  of  the  area  of  the  United  States.  The 
Interstate  Commerce  Commission  has  adhered 
to  its  original  classification  of  railways  into  ten 
groups,  based  upon  topographical  considerations, 
density  of  population,  nature  of  industrial  life, 
and  competitive  conditions,  although,  in  regard 
to  the  last,  the  Commission  expressed  itself  as 
unable  to  discover  system  in  railway  competition 
at  the  time  the  classification  was  made.  To  or- 
ganize one  interstate  council  for  each  of  these 
ten  groups  would  make  the  higher  councils  too 
numerous,  and,  under  present  conditions,  it  would 
hardly  bring  together  representatives  of  those 

33 


ECONOMIC    ADJUSTMENTS 

roads  which  belong  together  from  the  point  of 
view  of  ownership  and  of  rivalry  in  the  same 
productive  areas.  A  second  possibility  is  the  or- 
ganization of  an  interstate  council  for  each  of 
the  systems  of  railways,  among  which  a  com- 
munity of  interests  has  been  established.  But 
this,  too,  would  involve  ten  or  a  dozen  councils 
and  an  administrative  separation  of  railways 
which  belong  together.  The  third,  and  what 
appears  to  be  the  most  feasible  plan,  is  that  of 
accepting  the  present  territorial  limits  of  the 
dominating  freight  classifications  and  organizing 
an  interstate  council  within  each  of  them,  with 
the  possible  division  of  the  territory  west  of  the 
Mississippi.  This  would  make  three  interstate 
councils:  one  north  of  the  Ohio  and  Potomac 
rivers  and  east  of  the  Mississippi;  the  second 
south  of  the  Ohio  and  Potomac  rivers  and  east 
of  the  Mississippi ;  and  the  third  for  the  territory 
west  of  the  Mississippi.  The  distribution  and 
election  or  appointment  of  members  should  be 
governed  by  the  same  principles  as  those  which 
have  been  suggested  for  state  councils.  Each  of 
the  great  railway  systems  should  have  representa- 
tives, perhaps  on  a  mileage  basis.  The  great 
national  associations,  such  as  the  millers',  build- 
ers', druggists',  grocers',  liquor-dealers',  etc.,  might 
be  requested  to  send  a  representative  to  some  one 
of  the  three  interstate  councils;  and,  finally,  the 
state  councils  lying  within  any  one  of  these 
interstate  divisions  should  elect  representatives 

39 


RAILWAY    LEGISLATION 

to  membership  in  the  higher  council.  In  case 
a  state  lies  partly  in  one  and  partly  in  another 
intersfate  district,  the  Secretary  of  Commerce  or 
other  officer  might  designate  the  proportion  of 
representation  to  be  allotted  to  each  part,  in  ac- 
cordance with  law.  The  proceedings  should  also 
be  public  and  published  by  the  government.  The 
Interstate  Commerce  Commission,  every  member 
of  which  should  be  made  ex  officio  a  member  of 
the  interstate  councils,  might  supervise  the  pub- 
lication of  proceedings. 

The  aim  of  the  suggested  plan  is  obvious,  —  to 
represent  all  the  varied  interests  of  our  population 
in  an  advisory  capacity,  in  the  conduct  of  our 
railways.  These  councils  are  to  be  clearing 
houses  of  information  through  which  the  rail- 
ways and  the  public  will  learn  to  know  each 
other's  interests  better,  and  through  which  the 
material  interests  of  both  of  these  great  parties 
will  be  built  up  in  accordance  with  principles  of 
justice  and  equity.  Every  attempt  to  interfere 
in  the  purely  business  management  of  a  railway 
should  be  resisted ;  but  every  attempt  on  the 
part  of  a  railway  to  disregard  the  just  rights  of 
the  public  should  likewise  be  promptly  checked 
and  thoroughly  ventilated  in  the  councils.  The 
authenticated  facts  which  such  councils  can  bring 
together  and  the  publicity  which  is  to  be  given 
them  cannot  help  but  exert  a  powerful  influence 
in  educating  the  public  in  railway  affairs  and 
enlighten  the  railways  on  the  interests  of  the 

40 


ECONOMIC    ADJUSTMENTS 

public.  By  giving  councils  only  advisory  powers, 
the  legal  responsibility  still  remains  where  it  be- 
longs, —  in  the  hands  of  the  railway  officials.  The 
advice  and  recommendations  of  councils  need  not 
be  followed,  but  at  the  next  meeting  of  the  council 
the  manager  in  question  can  be  called  upon  to 
give  the  reasons  for  his  action;  and  with  well- 
informed  representatives  about  him,  nothing  but 
the  truth  can  prevail.  In  this  lies  one  of  the 
greatest  benefits  to  be  derived  from  such  a 
scheme,  and  it  is  difficult  to  conceive  of  a  more 
potent  factor  in  protecting  the  railways  against 
each  other,  and  in  visiting  obloquy  upon  the  one 
weak  or  unscrupulous  manager  who  persists  in 
defeating  the  best  plans  of  the  one  hundred  who 
would  adhere  to  principles  of  justice  without  legal 
compulsion. 

The  Secretary  of  Commerce  and  Labor  has  been 
mentioned  in  several  connections,  assuming  that 
such  a  new  cabinet  office  is  to  be  created.  It  is  to 
be  hoped  that  such  will  be  the  case,  and  the  pro- 
posed system  of  railway  advisory  councils  be  given 
a  place  in  this  new  cabinet  office.  Should,  how- 
ever, Congress  not  see  fit  to  establish  a  department 
of  commerce,1  the  suggested  councils  could  never- 
theless be  fitted  into  the  present  order  of  things  by 
making  the  Interstate  Commerce  Commission  the 
head  of  the  advisory  system.  The  Commission, 
being  hard  worked  already,  could  perhaps  exercise 
only  directive  and  supervisory  powers  over  the 

1  Such  a  department  has  now  been  established. 
41 


RAILWAY    LEGISLATION 

councils,  but  some  officer  in  the  offices  of  the  Com- 
mission, or  to  be  added  to  the  Commission,  could 
be  intrusted  with  the  detailed  management  of  the 
council  system.  The  council  system,  as  proposed, 
fits  into  the  present  order  of  things.  There  is  noth- 
'  ing  radical  or  disorganizing  about  it.  It  simply 
aims  to  bring  together  into  one  harmonious  system 
the  various  isolated,  independent  efforts  which  have 
long  been  made  by  many  railways  in  the  United 
States  and  by  private  organizations.  It  aims  to  do 
systematically  and  well  what  is  now  attempted 
without  system,  in  a  manner  more  or  less  one-sided. 
Institutional  history  is  largely  the  history  of 
transplanted  custom  and  law.  The  most  funda- 
mental institutions  of  American  civilization  find 
their  origin  in  the  remote  history  of  European 
peoples,  and  scores  of  existing  statutes,  state  and 
federal,  are  mere  adaptations  of  foreign  law  to  con- 
ditions in  the  United  States.  The  suggested  plan 
for  railway  councils  is  in  harmony  with  this  feature 
of  our  civic  development.  Advisory  councils  have 
been  in  successful  operation  in  various  countries, 
and  any  one  who  will  take  the  trouble  to  look  into 
their  history  will  probably  be  convinced  of  their 
efficiency  and  beneficence.  While  most  contem- 
porary systems  of  councils  exist  in  connection  with 
state  railways,  the  advisory  system  finds  its  origin 
in  private  initiative.  About  the  time  our  granger 
agitation  had  reached  its  zenith,  and  when  the 
Hamlet  of  the  play  had  made  his  appearance  in 
the  form  of  the  Potter  law  of  Wisconsin,  the 

42 


ECONOMIC    ADJUSTMENTS 

Chamber  of  Commerce  of  the  city  of  Miilhausen 
arranged  for  a  conference  between  its  representa- 
tives and  representatives  of  a  railway  upon  which 
that  city  was  largely  dependent.  The  result  of  the 
conference  was  so  encouraging  that  it  attracted 
the  attention  of  a  high  state  official,  who  immedi- 
ately recognized  the  intrinsic  merits  of  the  plan 
and  took  action  with  the  view  of  embodying  its 
principles  in  a  permanent  institution.  "  This  ar- 
rangement," says  the  minister  in  a  circular  letter, 
"  primarily  strives  to  establish  intimate  connection 
between  the  places  intrusted  with  the  administra- 
tion of  the  railways  and  the  trading  classes.  It 
will  keep  the  representatives  of  the  railways  better 
informed  as  to  the  changing  needs  of  trade  and 
industry  and  maintain  a  continued  understanding 
between  them  ;  and,  on  the  other  hand,  it  will  im- 
part to  commerce,  etc.,  a  greater  insight  into  the 
peculiarities  of  the  railway  business  and  the  legiti- 
mate demands  of  the  administration,  and  conse- 
quently, by  means  of  earnest  and  moderate  action, 
it  will  react  beneficially  upon  both  sides  through 
an  exchange  of  views."  It  was  only  a  few  years 
later,  in  1882,  when  Prussia  established  her  system 
of  advisory  councils,  which  twenty  years  of  experi- 
ence has  demonstrated  to  be  most  excellent.  There 
are  circuit  councils  and  a  national  council,  the 
former  constituting  advisory  bodies  of  the  different 
railway  directories  in  whose  hands  legal  responsi- 
bility rests,  and  the  latter  being  advisory  to  the 
Minister  of  Public  Works,  who  is  the  highest  legally 

43 


RAILWAY    LEGISLATION 

responsible  railway  officer.  The  circuit  councils 
are  more  local  in  their  nature  and  vary  in  size  from 
about  twenty-five  to  three  times  that  number. 
Membership  is  chiefly  elective.  The  national 
council  is  composed  of  forty  members,  of  whom 
ten  are  appointed  by  the  Minister  of  Public  Works 
and  thirty  elected  by  the  circuit  councils.  The 
councils  may  be  called  upon  to  deliver  opinions  on 
questions  submitted  to  them  by  the  proper  officials, 
and  they  may,  in  turn,  institute  inquiries  and  make 
recommendations  on  their  own  motion.  They 
have  no  legal  power  over  the  administration  of 
railways,  except  in  this  advisory  capacity,  and  full 
freedom  is  granted  to  railway  officials  to  act  as 
they  deem  best  in  the  management  of  railway 
properties. 

Japan  was  the  next  country  to  establish  an 
advisory  council  by  law.  The  Japanese  council 
is  composed  of  not  more  than  twenty  persons, 
representing  the  cabinet  departments,  both  houses 
of  Parliament  and,  for  special  purposes,  members 
with  limited  tenure,  who  serve  as  experts  in  the 
council.  The  powers  of  the  council  relate  to  ques- 
tions of  location,  construction,  financiering,  and 
operation.  While  the  department  of  communica- 
tion and  other  branches  of  the  government  may 
direct  inquiries  to  the  council,  the  latter  may  also 
act  on  its  own  initiative  and  bring  its  conclusions 
and  findings  before  the  proper  officials.  A  com- 
parison of  Japanese  with  Prussian  councils  shows 
important  differences  in  their  composition.  Under 

44 


ECONOMIC    ADJUSTMENTS 

the  Prussian  law  bureaucracy  is  guarded  against 
by  the  exclusion  from  the  council  of  all  immediate 
state  officials.  In  Japan  the  law  specifically  pro- 
vides for  the  inclusion  in  the  council  of  cabinet 
officers  and  members  of  the  legislature.  Under 
the  Japanese  system  it  is  possible  to  pack  the 
advisory  council  with  persons  in  harmony  with 
the  government,  which  may  destroy  the  value  of 
the  council.  While  avenues  of  communication 
between  legislatures  and  advisory  councils  should 
be  kept  open,  the  law  should  make  it  impossible 
for  members  of  the  legislature  and  state  officers  to 
hold  a  seat  in  the  advisory  council.  State  legisla- 
tures and  Congress  may  wish  to  act  on  the  findings 
of  fact  or  recommendations  of  advisory  councils, 
and  if  the  membership  of  councils  and  legislatures 
can  be  made  essentially  one,  the  advisory  nature 
of  the  councils  will  be  annihilated.  The  exclusion 
of  public  officers  and  legislators  from  councils 
should  be  insisted  upon. 

In  Switzerland,  circuit  councils  and  an  adminis- 
trative council  were  instituted  by  the  federal  law 
of  1897.  Circuit  councils  embrace  from  fifteen  to 
twenty  members,  of  whom  the  Bundesrath  elects 
four  and  the  cantons  eleven  to  sixteen.  The  higher 
or  administrative  council  numbers  fifty-five,  of 
whom  twenty-five  are  elected  by  the  Bundesrath, 
an  equal  number  by  the  cantons,  and  the  remaining 
five  by  the  circuit  councils.  The  law  expressly 
provides  that  in  these  elections  agriculture,  trade 
and  industry  shall  be  properly  represented. 

45 


RAILWAY    LEGISLATION 

These  three  —  Prussia,  Japan,  and  Switzerland 
—  are  the  only  countries  in  which  advisory  coun- 
cils have  been  created  by  law.  In  a  large  number 
of  other  countries  similar  councils  have  been  estab- 
lished through  administrative  agents,  the  composi- 
tion and  functions  of  the  councils  following  the 
principles  of  the  Prussian  system.  For  a  quarter 
of  a  century  France  has  had  a  consulting  commit- 
tee of  forty-five  which  is  quite  similar  to  the  Japan- 
ese council  in  that  its  members  are  not  elected,  but 
appointed  chiefly  from  officials  and  members  of  the 
legislature,  and  that  social  and  economic  interests 
are  represented  only  to  a  limited  extent.  The 
functions  of  this  committee  relate  to  approval  of 
rates,  construction  of  laws  and  ordinances,  grant- 
ing charters,  railway  agreements,  stations,  train 
service,  etc.  It  is  similar  to  the  advisory  councils 
of  the  other  three  countries  in  that  it  may  be  called 
upon  for  opinions  and  undertake  investigations 
on  its  own  initiative.  In  Russia,  the  Minister  of 
Trade  appoints  representatives  of  the  agricultural 
and  industrial  classes ;  the  railway  companies  elect 
their  members  subject  to  the  approval  of  the 
minister;  and  the  Czar  appoints  representatives 
of  the  departments  of  the  cabinet.  The  Italian 
tariff  council  consists  of  higher  ministerial  officials 
and  railway  directors,  while  the  supreme  council  is 
composed  of  general  inspectors  and  chiefs  of  divi- 
sions, divided  into  three  groups,  each  of  which  can 
act  only  on  matters  relating  to  the  lines  of  interest 
represented  by  that  group.  Bavaria  has  an  advi- 


ECONOMIC    ADJUSTMENTS 

sory  council  composed  of  twenty-five  members 
appointed  by  the  king.  A  number  of  the  mem- 
bers are  nominated  by  industrial  organizations.  Of 
the  eighteen  members  in  the  council  of  Saxony, 
six  are  elected  by  chambers  of  commerce,  five  by 
agricultural  societies,  and  seven  are  appointed  by 
the  Minister  of  Finance. 

More  than  half  a  dozen  other  European  states 
can  be  added  to  the  list,  but  it  is  unnecessary. 
Enough  has  been  said  to  show  that  the  system  of 
advisory  councils  proposed  for  the  United  States 
is  not  a  leap  into  the  dark.  It  is  a  practical 
scheme,  elaborated  in  various  countries  by  practi- 
cal men,  and  it  has  stood  the  test  of  experience. 
It  involves  no  destruction  of  existing  arrangements. 
It  requires  none  but  nominal  appropriations  out  of 
the  public  treasury.  It  necessitates  no  important 
new  machinery.  In  fact,  it  is  but  a  bringing  together 
of  separated  wheels  and  shafts  and  placing  them 
in  proper  connection  with  one  another  so  as  to 
constitute  an  efficient  machine  for  public  service. 

That  the  public  frequently  feels  suspicious  con- 
cerning railways  no  one  will  question.  That  this 
suspicion  is  sometimes  well  founded  is  beyond  con- 
troversy ;  and  that  this  same  suspicion  on  the  part 
of  the  public  is  often  out  of  all  proportion  to  the 
cause  is  equally  true.  By  way  of  illustration,  a 
personal  incident  may  be  alluded  to.  Several 
years  ago,  through  the  courtesy  of  a  railway  presi- 
dent, the  writer  came  into  possession,  for  private 
use,  of  the  proceedings  of  a  railway  committee, 

47 


RAILWAY    LEGISLATION 

which  are  private  in  their  nature.  He  had  won- 
dered many  times  what  such  a  committee  might  be 
doing;  and,  because  of  the  secrecy  surrounding 
its  proceedings,  was  inclined  to  believe  that  action 
contrary  to  public  interests  was  sometimes  agreed 
upon.  After  a  careful  examination  of  the  entire 
set  of  documents,  he  is  prepared  to  state  that  he 
firmly  believes  that  the  publication  of  every  page 
of  these  proceedings  could  bring  nothing  but  good, 
or  at  least  no  harm,  to  the  railways  concerned. 
Throughout  the  reading  of  the  many  resolutions, 
orders,  petitions,  and  decisions  one  is  impressed 
again  and  again  with  the  earnest  desire  on  the 
part  of  the  railway  men  concerned  to  find  the  cor- 
rect solution  and  to  pursue  a  just  line  of  action. 
But  the  public  is  much  like  the  boy  with  a  balloon 
—  it  wants  to  know  what  there  is  inside.  The  pub- 

:lic  factor  in  railway  enterprise  is  so  large  compared 
with  the  private  factor,  that  the  public  is  fairly 
entitled  to  know,  within  reasonable  limits,  what  is 
inside.  And  this  the  railways  have  recognized  in 
many  ways,  for  it  is  a  familiar  fact  that  no  stock 
can  sell  well  and  maintain  its  level  on  the  exchange 
unless  the  promoters  take  the  public  into  their  con- 
fidence to  the  extent  of  issuing  full  and  accurate 
financial  statements.  The  chairman  of  one  of  the 
great  classification  committees  struck  the  core  of 
the  question  when  he  said  that  the  general  public 
might  without  detriment  to  railway  interests  know 
everything  his  committee  was  doing  and  that  pub- 
lic opinion  would  uphold  their  action,  but  that  per- 


ECONOMIC    ADJUSTMENTS 

haps  not  enough  was  at  present  given  to  the  public. 
A  system  of  advisory  councils  makes  it  easy  for 
both  railways  and  people  to  acquaint  each  other 
with  their  doings,  and  the  resulting  knowledge  will 
add  as  much  to  harmony  between  them  as  it  will 
increase  the  value  of  the  services  performed  by 
the  railways. 


49 


PART   II 

THE   PROGRESS   OF   RAILWAY 
LEGISLATION1 

1The  greater  portion  of  Part  II  was  included  in  a  report  to 
the  United  States  Industrial  Commission,  published  in  Vol.  IX, 
pp.  897-1004,  of  the  Reports  of  the  Commission.  The  present 
treatment  differs  from  the  report  to  the  Commission  in  that  specific 
references  have  been  indicated  wherever  practicable. 


CHAPTER   I 
EARLY  RAILWAY  CHARTERS 

General  Characteristics.  —  A  railway  charter  may 
be  defined  as  a  special  act  of  a  legislative  body 
authorizing  a  person  or  persons  duly  organized  to 
construct  and  operate  a  railway  or  railways  in  a 
certain  territory  under  certain  conditions.  Such 
a  legislative  act  is  a  private  law.  With  the  ex- 
ception of  a  few  of  the  Western  States  —  Arizona 
(Territory),  California,  Colorado,  Idaho,  and  Mon- 
tana —  which  began  with  general  laws,  special 
charters  have  been  granted  by  every  state  and 
territory  in  the  United  States.  The  charters 
have  numerous  resemblances  and  differences 
which  will  be  noted  more  in  detail  later  on,  but 
at  the  outset  it  is  well  to  notice  certain  features 
which  charters  in  all  parts  of  the  United  States 
have  in  common.  In  spite  of  numerous  striking 
differences  which  exist,  we  may  speak  of  a  typical 
railway  charter. 

The  leading  features  which  are  common  to 
railway  charters  of  the  different  states  may  be 
associated  with  the  following  points,  every  charter 
having  one  or  more  provisions  relating  to  some  or 
all  of  these  points :  Name  of  company ;  number 

53 


RAILWAY    LEGISLATION 

of  commissioners ;  number  of  board  of  directors ; 
the  amount  of  capital  stock ;  size  and  number  of 
shares;  the  amount  of  the  payment  per  share  at 
the  time  of  subscription,  and  the  maximum  assess- 
ment per  share,  together  with  the  number  of  days' 
notice  required ;  systems  of  voting ;  the  time  limit 
as  to  beginning  and  completing  construction,  junc- 
tions, branches,  and  extensions ;  route ;  expropria- 
tion and  methods  of  valuation,  together  with  the 
manner  in  which  disputes  are  settled ;  the  amount 
of  land  which  may  be  held ;  the  number  of  miles 
to  be  constructed  before  traffic  may  be  opened ; 
the  power  to  borrow  money  and  the  rate  of 
interest;  the  distribution  of  dividends,  liability 
of  stockholders,  annual  reports,  passenger  and 
freight  rates.  In  every  state  charters  may  be 
found  which  contain  provisions  on  only  a  few  of 
these  points,  while  in  most  states  charters  were 
granted  containing  provisions  on  all  of  them,  and 
perhaps  others  not  here  indicated. 

Following  an  old  English  custom,  a  few  charters 
in  a  number  of  states  contain  a  preamble.  Where 
a  preamble  is  found,  it  usually  sets  forth  the  rea- 
sons why  the  proposed  railway  should  be  con- 
structed, the  public  service  which  it  can  be  made 
to  perform,  and  the  manner  in  which  the  project 
is  to  be  carried  out.  Preambles  of  this  kind  can 
be  found  in  charters  of  states  so  far  apart  as 
Wisconsin,  Pennsylvania,  and  Georgia.  Similarly, 
charters  in  some  North  Atlantic  States  declare  the 
public  use  of  the  projected  railways.  Both  the 

54 


EARLY    RAILWAY    CHARTERS 

preamble  and  the  declaration  of  public  utility 
serve  the  same  purpose,  namely,  to  bring  before 
the  legislative  body  before  the  franchise  is  granted 
the  social  and  economic  conditions  which  make  the 
project  desirable,  if  not  necessary. 

While  there  is  no  general  order  in  which  the 
different  provisions  of  a  typical  railway  charter 
are  incorporated,  in  the  individual  charters  of  the 
different  states,  it  is  very  common  for  a  charter  to 
enumerate  first  of  all  a  number  of  persons,  desig- 
nated commissioners,  under  whose  direction  the 
proposed  railway  is  to  be  organized.  These  com- 
missioners are  authorized  to  open  subscription 
books  in  specified  localities  on  a  certain  date, 
and  to  continue  to  receive  subscriptions  during 
a  certain  period  of  time.  The  charter  further 
specifies  that,  after  a  certain  minimum  sum  has 
been  subscribed,  and  a  certain  payment  on  each 
subscription,  varying  greatly  in  its  amount,  has 
been  made,  the  subscribers  shall  hold  a  meeting 
and  elect  a  board  of  directors.  The  size  of  the 
board  to  be  elected,  like  the  number  of  commis- 
sioners, varies  very  greatly  in  the  different  char- 
ters, although  nine  and  thirteen  are  perhaps  the 
most  common  numbers.  In  a  few  states,  like 
Connecticut,  Maryland,  and  Kentucky,  charters 
were  granted  making  it  obligatory  on  the  part 
of  the  elective  officers  to  bind  themselves  to  the 
performance  of  their  respective  duties  by  an  oath. 

The  board  of  directors  having  been  elected,  the 
company  has  obtained  legal  status  and  is  prepared 

55 


RAILWAY    LEGISLATION 

to  carry  out  the  provisions  of  the  charter  in  its 
possession.  The  powers  granted  to  the  company, 
acting  through  the  board  of  directors,  include 
powers  common  to  corporate  bodies,  such  as 
purchasing,  holding,  selling,  and  leasing  prop- 
erty; to  have  perpetual  succession;  to  sue  and 
be  sued;  to  use  a  common  seal;  and  in  general 
to  exercise  those  powers,  rights,  and  privileges 
which  other  corporate  bodies  exercise,  in  order 
to  carry  out  the  provisions  of  the  charter. 

One  power  which  is  invariably  given  to  the 
board  of  directors,  with  or  without  restrictions, 
relates  to  rates ;  and,  considering  the  great  im- 
portance which  has  always  been  attached  to  the 
question  of  rates,  it  may  be  well  to  bring  together 
typical  features  of  charters  of  different  states  on 
this  important  question. 

Charter  Provisions  as  to  Rates.  —  A  charter 
granted  by  Connecticut  in  1832  provides  that 
the  company  may  charge  "such  rates  per  mile 
as  may  be  agreed  upon  and  established  from  time 
to  time  by  the  directors  of  said  corporation."1 
This,  in  substance,  is  the  provision  on  rates  which 
is  more  frequently  found  in  railway  charters  in 
the  United  States  than  any  other.  The  Con- 
necticut charter  just  referred  to  names  three 
"  commissioners/'  who  shall  be  sworn  to  a  faith- 
ful discharge  of  the  trust  imposed  upon  them  by 
virtue  of  the  act,  and  who  shall  not  be  interested 
in  any  way  whatsoever  in  the  company.2 

1  Pr.  Laws,  1835-36,  p.  992.  2  §§  5,  7,  8,  of  charter. 

56 


EARLY    RAILWAY    CHARTERS 

A  Colorado  charter1  of  1865  provides  as  fol- 
lows: "They  [the  board  of  directors]  shall  have 
power  to  establish  such  rates  for  the  transportation 
of  persons  and  property  in  all  matters  and  things 
respecting  the  use  of  said  road  and  the  transporta- 
tion of  property  as  may  be  necessary :  Provided, 
That  the  legislative  assembly  of  this  territory,  or 
any  legislative  body,  having  legislative  authority 
over  the  county  in  which  said  road  is  located, 
may,  after  the  expiration  of  twenty-five  years 
from  the  passage  of  this  act,  and  at  the  expira- 
tion of  each  period  of  twenty  years  thereafter, 
prescribe  rates  to  be  charged  and  collected  by 
said  corporation  for  transporting  passengers  and 
freight  over  said  road  and  the  branches  thereof.'*2 

One  of  the  earliest  Florida 3  charters  grants  the 
company  "  the  right  to  demand  and  receive  such 
prices  and  sums  for  transportation  as  may  be 
from  time  to  time  authorized  and  fixed  by  the 
by-laws  of  said  company  or  companies :  Provided, 
That  such  prices  and  sums  shall  not  be  increased 
without  at  least  sixty  days'  previous  notice  thereof 
being  given."  This  charter  further  provided  that 
the  "  tolls  "  should  not  yield  more  to  the  company 
than  twenty  per  cent  per  annum  on  its  stock,  and 
any  excess  over  twenty  per  cent  should  be  paid 
into  the  internal  improvement  fund. 

Maximum  rates  are  prescribed  in  a  charter 
granted  by  Georgia4  in  1837,  as  follows:  " Pro- 

1  Laws,  1865,  p.  in.  8  Laws,  1849-51,  ch.  317,  §  14.' 

2§  8.  *Laws,  1837,  p.  J93- 

57 


RAILWAY    LEGISLATION 

vided,  That  the  charge  of  transportation  or  con- 
veyance shall  not  exceed  twenty-five  cents  per 
one  hundred  pounds  on  heavy  articles,  and  ten 
cents  per  cubic  foot  on  articles  of  measurement 
for  every  hundred  miles,  and  five  cents  a  mile 
for  every  passenger."  Similar  provisions  were 
incorporated  in  Georgia  during  succeeding  years. 

An  Indiana1  charter  of  1832  empowers  the 
company  to  "  change,  lower,  or  raise  rates  at 
pleasure :  Provided,  That  the  rates  established 
from  time  to  time  shall  be  posted  in  some  con- 
spicuous place  or  places." 

A  provision  similar  to  that  found  in  the  Florida 
charter  above  quoted  is  found  in  a  Connecticut 
charter  of  1829.  "It  shall  be  lawful  for  them 
[board  of  directors]  to  charge  for  every  hundred 
pounds  transported  sixty  miles  or  upwards,  2\ 
mills  per  hundred  pounds  weight  for  each  mile ; 
for  every  hundred  pounds  weight  transported 
over  twenty  miles  and  under  sixty  miles,  3  mills 
for  each  mile;  for  every  hundred  pounds  below 
twenty  miles,  3^  mills  per  mile."  Passengers 
were  to  pay  4  cents  per  mile. 

A  charter  granted  by  Maryland2  in  1827  pre- 
scribed different  rates  for  different  directions. 
From  north  to  south  the  freight  charges  were 
not  to  exceed  one  cent  per  ton-mile  for  toll  and 
three  cents  per  ton-mile  for  transportation;  south 
to  north  the  charges  were  not  to  exceed  three 
cents  per  ton-mile  for  tolls  and  three  cents  per 

1  Laws,  1832,  ch.  144.  2  Laws,  1827,  ch.  72. 

58 


EARLY    RAILWAY    CHARTERS 

ton-mile  for  transportation.  The  maximum  rate 
for  the  transportation  of  passengers  was  fixed  at 
three  cents  per  mile.  The  same  state  granted  a 
charter  in  1831  which  fixed  the  maximum  rate 
for  freight  at  three  cents  per  ton-mile  for  both 
toll  and  transportation,  and  for  passengers  not 
exceeding  three  cents  per  mile,  provided  the  pas- 
senger does  not  carry  baggage  exceeding  fifty 
pounds  in  weight  and  occupying  space  not  ex- 
ceeding two  cubic  feet. 

The  early  Massachusetts  charters,  like  other 
New  England  charters,  are  the  most  complete 
that  can  be  found  in  the  legislation  of  any  of  the 
states.  One  of  the  earliest  charters,1  granted  in 
1829,  refers  to  a  general  law  enacted  by  Massa- 
chusetts in  i8o8,2  thus  subjecting  the  corpora- 
tion created  by  the  charter  to  the  provisions  of 
a  general  law.  That  is  perhaps  the  earliest  in- 
stance of  its  kind.  While  this  charter  fixes  a 
maximum  freight  rate,  it  does  not  mention  pas- 
senger rates  at  all;  but  another  charter  granted 
by  the  same  state  during  the  same  year  provides 
that  the  company  may  impose  charges  "not  ex- 
ceeding three  cents,  and  for  every  passenger 
passing  and  repassing  not  exceeding  two  cents 
per  mile,  which  shall  be  conveyed  upon  said 
railroad,  exclusive  of  the  expense  of  transporta- 
tion, payable  at  such  time  and  in  such  manner 
as  may  be  described  in  the  by-laws."  It  will  be 
noticed  that  this  charter,  like  the  Maryland  charter 

1  Laws,  1829,  ch.  26.  2  Laws,  1808,  ch.  65. 

59 


RAILWAY    LEGISLATION 

already  referred  to,  makes  at  least  a  theoretical 
division  of  the  aggregate  charge  into  "toll"  and 
"  transportation." 

The  early  charters  granted  by  Michigan  are 
essentially  like  those  granted  by  Ohio,  Illinois, 
and  Wisconsin.  Many  of  them  are  quite  com- 
plete and  contain  leading  features  of  typical 
charters.  Those  which  are  more  carefully  drawn 
contain  provisions  relating  to  maximum  rates  for 
both  freight  and  passengers.  The  amount  which 
the  company  may  charge  varies,  however,  very 
materially,  not  only  in  charters  granted  during 
succeeding  years,  but  also  in  those  enacted  dur- 
ing the  same  year.  For  all  of  the  Western  States 
the  statement  holds  true  that  among  earlier  char- 
ters we  find  more  numerous  examples  of  maximum 
rates,  even  though  the  same  charters  give  the 
board  of  directors  wide  discretionary  powers 
over  rates.  Following  the  period  during  which 
charters  of  this  kind  were  granted,  it  was  more 
common  to  omit  the  maximum  rate  feature 
and  to  incorporate  the  power  over  rates  in  the 
board  of  directors,  giving  this  body  the  right 
to  charge  such  rates  as  it  may  from  time  to 
time  think  expedient.  It  may  be  noticed  that 
an  early  Ohio1  charter  makes  a  distinction 
in  charges  upon  ordinary  and  "pleasure  car- 
riages." 

There  is  no  essential  difference  among  the  early 
charters  of  Pennsylvania  and  Maryland,  except 

1  Laws,  1838,  p.  140. 

60 


EARLY    RAILWAY    CHARTERS 

perhaps  that  in  Pennsylvania  a  distinction  was 
sometimes  made  between  "through"  and  "way" 
passengers.  Nor  is  the  difference  between  the 
charters  in  these  states  and  those  granted  by 
North  and  South  Carolina  a  striking  one,  except 
that  the  systems  of  voting  rather  common  in  the 
Carolinas  do  not  appear  in  the  Atlantic  States 
farther  north.  In  1837  North  Carolina  granted 
a  charter  which  provided  for  maximum  rates  as 
follows :  "  On  persons,  not  exceeding  six  cents  per 
mile  for  each,  unless  the  distances  to  which  any 
person  be  transported  be  less  than  ten  miles,  in 
which  case  the  president  and  board  of  directors 
may  be  entitled  to  make  an  extra  charge  of  fifty 
cents  for  taking  up  and  putting  down  each  person 
so  transported ;  for  transportation  of  goods,  .  .  . 
not  exceeding  an  average  of  ten  cents  per  ton- 
mile;  and  for  the  transportation  of  mails,  such 
sums  as  they  may  agree  upon." 1  In  a  similar 
manner  later  charters  in  both  North  and  South 
Carolina  prescribe  maximum  rates.  These  rates 
frequently  bear  a  direct  relation  to  distance  and 
space  occupied. 

These  quotations  suffice  to  indicate  the  manner 
in  which  early  charters  in  different  parts  of  the 
United  States  attempted  to  control  rates.  The 
variety  existing  among  provisions  of  this  kind  is 
no  greater  than  among  provisions  on  other  sub- 
jects, and  in  nearly  all  instances  the  maximum 
rates  prescribed  appear  to  have  been  much  above 

i  Laws,  1837,  ch-  40,  §  3°- 
61 


RAILWAY    LEGISLATION 

what  railway  companies  would  in  ordinary  circum- 
stances be  inclined  to  charge. 

As  a  matter  of  interest,  rather  than  of  impor- 
tance, it  may  be  noted  that  in  a  few  states  several 
charters  prescribe  rates  by  reference  to  another 
charter  previously  granted  by  the  same  legislature. 
Thus  a  Michigan1  charter  of  1848  refers2  to  rates 
charged  by  the  Michigan  Central  Railway ;  a 
Georgia3  charter  of  1838  specifies  that  the  com- 
pany may  charge  as  much  as  the  Georgia  Railroad 
and  Banking  Company ;  in  1831  Mississippi  adopted 
a  charter  granted  by  Louisiana ;  and  a  Tennessee  4 
charter  of  1851  grants  the  same  provisions  which 
have  previously  been  granted  to  the  Nashville  and 
Chattanooga  road. 

Publicity  of  Rates.  —  Publicity  of  rates  is  not 
generally  provided  for,  although  provisions  on  this 
subject  are  found  in  some  of  the  charters  granted 
by  Indiana,  Louisiana,  Maine,  New  Hampshire, 
Vermont,  New  Jersey,  South  Carolina,  Georgia, 
Missouri,  and  in  occasional  charters  granted  in  the 
Northwestern  States,  all  of  which  are  fairly  well 
illustrated  by  the  clause  of  an  Indiana  charter 
quoted  above.  A  Louisiana5  charter  of  1831, 
after  providing  that  such  rates  may  be  charged  as 
shall  have  been  previously  fixed  by  the  resolution 
of  the  board  of  directors,  stipulates  that  "rates 

1  Laws,  1848,  no.  152. 

2  Rates  not  to  exceed  those  charged  by  the  Michigan  Central. 
8  Laws,  1838,  p.  174.  4Laws,  1851-52,  ch.  103. 

6  Laws,  1831,  ch.  55. 
62 


EARLY    RAILWAY    CHARTERS 

shall  be  published  in  some  newspaper,  .  .  .  and 
it  shall  be  unlawful  to  increase  such  rates,  after  the 
same  shall  have  been  established,  during  the  period 
for  which  they  have  been  established."  The  same 
charter  further  provides  that  every  new  board  of 
directors  shall  publish  a  schedule  of  rates  within 
ten  days  after  its  election.  Another  charter  granted 
two  years  later  specifies  the  number  of  newspapers 
in  which  the  schedule  of  rates  shall  be  published, 
and  that  such  rates  "  shall  not  be  changed  during 
the  year  in  which  they  are  established."  Publicity 
of  a  different  kind,  and  quite  unique  in  railway 
legislation,  is  provided  for  by  joint  resolution  of 
the  South  Carolina1  legislature  of  1836,  "That 
no  charter  for  the  incorporation  of  railroad  com- 
panies, or  in  extension  thereof,  shall  be  granted  by 
the  legislature  unless  three  months'  public  notice 
of  the  application  for  same  be  previously  given  by 
advertising  in  one  of  the  papers  of  the  city  of 
Charleston,  and  also  in  the  paper  of  one  of  the 
counties  in  which  said  road  may  be  situated,  or,  if 
there  be  no  newspaper  in  such  county,  then  by 
publication  of  such  notice  at  the  court-house  or 
some  conspicuous  place  in  the  county."  The 
South  Carolina  resolution  evidently  aimed  to  ac- 
complish the  same  thing  as  the  declaration  of 
utility  in  some  of  the  other  states,  namely,  to  give 
interested  parties  an  opportunity  to  be  heard  and 
to  demonstrate  to  the  public  the  necessity  of 
incorporating  the  projected  company. 

1  Rev.  Stat,  1873,  ch.  65,  p.  366. 

63 


RAILWAY    LEGISLATION 

Another,  but  a  much  more  restricted,  kind  of 
publicity  is  that  provided  for  in  some  charters 
granted  in  all  parts  of  the  country,  by  giving 
stockholders  the  right  to  inspect  the  books  of  the 
company  at  any  time.  This,  however,  is  not  pub- 
licity as  we  now  understand  it,  for  it  simply  gives 
the  persons  directly  interested  in  the  financial  suc- 
cess of  the  enterprise  access  to  the  books,  while 
the  real  and  essential  publicity  suggested  to-day  is 
of  a  very  different  kind.  It  is  therefore  more  a 
matter  of  curiosity  than  of  vital  importance  that 
notice  is  taken  of  a  New  Hampshire1  charter  of 
1836,  which  provides  that  the  books  of  the  com- 
pany shall  be  open  for  inspection  by  a  committee 
of  the  legislature.  Analogous  provisions  are  occa- 
sionally met  with  in  charters  of  Rhode  Island  and 
the  Northwestern  States,  but  to  what  extent  legis- 
lative committees  ever  exercise  this  privilege  does 
not  appear. 

Discriminations.  —  Relatively  few  early  charters 
contain  any  reference  to  the  matter  of  discrimina- 
tion, which  figures  so  largely  in  later  railway  legis- 
lation. Among  the  states  which  granted  charters 
containing  clauses  on  discrimination  are  North 
Carolina,  Rhode  Island,  Vermont,  and  Wisconsin. 
A  North  Carolina2  charter  of  1837  savs»  "They 
shall  give  no  undue  preference  to  the  property  of 
one  person  over  that  of  another,  but  as  far  as 
practicable  shall  carry  each  in  the  order  of  time 
in  which  it  shall  be  delivered  or  offered  for  trans- 

1  Laws,  1836,  ch.  66,  §  6.  2  Laws,  1837,  ch.  40. 

64 


EARLY    RAILWAY    CHARTERS 

portation  with  the  tolls  paid  or  tendered/'  An 
early  Wisconsin  charter  contains  a  much  more 
elaborate  provision  on  discriminations. 

Administrative  Agents.  —  So  far  as  internal  evi- 
dence is  concerned,  early  charters  were  granted 
upon  the  assumption  that  the  companies  organized 
under  them  would  voluntarily  fulfil  the  obligations 
imposed  by  the  franchise.  The  assumption  which 
underlies  early  as  well  as  later  railway  charters  is 
that  they  execute  themselves.  It  is  consequently 
doubly  interesting  to  observe  that  the  small  state 
of  Rhode  Island  apparently  took  the  initiative  in 
establishing  commissions,  for  in  1836  the  legisla- 
ture l  of  that  state  passed  "  An  act  to  establish 
railroad  commissioners."  After  providing  for  the 
appointment  of  three  commissioners  by  the  general 
assembly,  the  act  specifies  that  "  it  shall  be  the 
duty  of  said  board  of  commissioners,  upon  com- 
plaint or  otherwise,  whenever  a  majority  of  them 
shall  deem  it  expedient,  personally  to  examine  into 
any  or  all  of  the  transactions  or  proceedings  of  any 
railroad  corporation  that  now  is,  or  hereafter  may 
be,  authorized  and  established  in  this  state,  in  order 
to  secure  to  all  the  citizens  and  inhabitants  of  the 
same  the  full  and  equal  privileges  of  the  transpor- 
tation of  passengers  and  property  at  all  times  that 
may  be  granted,  either  directly  or  indirectly,  by 
any  such  corporation  to  the  citizens  of  any  other 
state  or  states,  and  ratably  in  proportion  to  the 
distance  any  such  persons  or  property  may  be 

1  Laws,  1836,  p.  1087. 
F  65 


RAILWAY    LEGISLATION 

transported  on  any  railroad  as  aforesaid  ;  and  to 
inquire  into  any  contract,  understanding,  or  agree- 
ment by  which  any  railroad  company  shall  attempt 
to  transfer  or  give  to  any  steamboat  company  any 
favor  or  preference  over  any  other  such  company 
or  boat,  either  as  to  freight  or  passage,  contrary 
to  the  true  intent  and  meaning  of  this  act  and 
the  several  acts  hereafter  passed  in  relation  to 
railroads." 

The  commissioners  in  the  Connecticut  charter 
quoted  before  may  here  be  recalled,  together  with 
the  boards  of  internal  improvement  of  Tennessee  1 
and  Florida,2  which  had  some,  although  much  more 
restricted,  administrative  powers  over  certain  rail- 
ways. Analogous  functions  were  performed  under 
a  Vermont3  charter  of  1843,  by  which  "the  su- 
preme court  at  any  stated  session  thereof,  .  .  . 
upon  application  of  ten  freeholders  in  any  town 
or  towns  through  which  said  road  may  pass,  may 
alter  or  establish  the  rates  of  toll  upon  said  road 
for  any  term  not  exceeding  ten  years  at  any  one 
time."  It  is  evident  that  the  Rhode  Island  com- 
mission is  the  only  one  of  these  bodies  that  could 
exercise,  under  the  law,  fairly  comprehensive  ad- 
ministrative functions.  The  Vermont  court  is  here 
alluded  to  simply  because  it  is  an  illustration  of 
the  introduction  into  the  management  of  railway 
affairs  of  persons  other  than  those  directly  inter- 
ested in  the  corporation. 

1  Laws,  1838.  2Laws,  1855,  ch-  6l°- 

3  Laws,  1843,  no-  56,  §  9« 

66 


EARLY    RAILWAY   CHARTERS 

Powers  reserved  to  the  Legislature.  —  Considered 
numerically,  a  majority  of  the  charters  granted  in 
the  different  states  do  not  reserve  to  the  legislature 
either  specified  or  general  powers.  It  is  very  com- 
mon, however,  for  charters  to  contain  provisions 
reserving  to  the  legislature  the  right  to  regulate, 
with  more  or  less  latitude,  the  charges  of  transpor- 
tation. In  the  New  England  States  this  power 
could  generally  t-.  exercised  under  charter  rights 
as  long  as  the  net  income  of  the  railway  in  ques- 
tion exceeded  a  certain  per  cent,  usually  ten.  Thus 
a  Massachusetts1  charter  of  1829  reserves  to  the 
legislature  the  right  to  revise  the  schedule  of  rates 
every  four  years  if  the  net  income  exceeds  ten  per 
cent.  A  contemporary  New  Hampshire  2  charter 
gives  the  board  of  directors  full  power  over  rates, 
and  permits  the  legislature  to  reduce  them  after 
ten  per  cent  net  on  the  investment  has  been  real- 
ized. A  clause  typical  of  provisions  of  this  kind  is 
found  in  an  early  Maryland3  charter,  "That  noth- 
ing in  this  act  shall  be  construed  so  as  to  prevent 
the  legislature  of  this  state  from  legislating  upon 
the  subject  of  the  tolls  reserved  in  this  act  at  any 
time  after  the  expiration  of  twenty  years  after  the 
passage  of  the  act:  Provided,  That  at  no  time 
shall  the  toll  be  so  regulated  or  reduced  as  to  yield 
less  than  six  per  cent  per  annum."  Other  Mary- 
land as  well  as  Pennsylvania  charters  embody 
analogous  provisions.  Ten  per  cent  net  income  is 

1  Laws,  1829,  ch.  93,  §  10.  2  Laws,  1844,  ch.  128,  §  11. 

3  Laws,  1831,  ch.  104,  §  24. 

67 


RAILWAY   LEGISLATION 

by  far  the  most  common  limit  placed  upon  the  dis- 
cretionary powers  of  legislatures  over  railway  rates 
in  all  the  states  in  which  such  chartered  provisions 
are  found.  In  a  few  instances  the  rate  of  net 
profits  permitted  under  the  law  is  very  much 
larger.  For  instance,  in  Indiana1  charters  were 
granted  permitting  the  legislature  to  regulate  rates 
whenever  the  profits  exceeded  fifteen  per  cent,  and 
any  excess  above  fifteen  per  cent  was  to  be  paid 
into  the  common  school  fund. 

Another  right  reserved  to  the  state  in  a  con- 
siderable number  of  charters  is  the  power  to  pur- 
chase the  railway  after  a  certain  number  of  years. 
This  power  was  frequently  reserved  in  the  charters 
of  the  New  England  States,  the  significance  of 
which  was  perhaps  illustrated  in  the  agitation 
accompanying  the  recent  leasing  of  the  Boston  and 
Albany  Railway.  A  number  of  early  Massachu- 
setts charters  reserved  to  the  state  the  power  to 
purchase  after  a  period  of  twenty  years.  In  Ver- 
mont this  period  of  discretionary  power  of  the 
state  varied  from  twenty  to  fifty  years.  New 
Hampshire  followed  Massachusetts,  fixing  it  at 
twenty.  An  Illinois2  charter  of  1850  gives  the 
state  the  right  to  purchase,  after  twenty-five  years, 
by  refunding  to  the  company  the  cost  of  the  entire 
plant,  with  interest  at  the  rate  of  six  per  cent  per 
annum.  In  New  Jersey3  similar  right  was  re- 
served after  thirty  years.  An  early  Michigan 4 

1  Laws,  1832,  ch.  144,  §  24.  3Laws,  1832,  p.  376,  §  17. 

2  Laws,  1850,  p.  150.  4Laws,  1836,  p.  267,  §  19. 

68 


EARLY    RAILWAY    CHARTERS 

charter  contains  a  provision  which  is  typical  of 
isolated  charters  in  all  of  the  Northwestern  States, 
"  The  state  shall  have  the  right,  at  any  time  after 
the  expiration  of  fifteen  years  from  the  completion 
of  said  road,  to  purchase  and  hold  the  same  for  the 
use  of  the  state  at  a  price  not  exceeding  the  original 
cost  of  said  road,  exclusive  of  repairs  thereof,  and 
fourteen  per  cent  thereon,  of  which  cost  an  accu- 
rate account  shall  be  kept  and  submitted  annually, 
on  the  first  Monday  in  January,  to  the  legislature, 
duly  attested  by  the  oath  of  the  officers  of  said 
company,  and  at  such  other  times  as  the  legislature 
shall  require  the  same."  In  Missouri1  a  charter 
granted  in  1837  reserved  to  the  general  assembly 
the  right  to  purchase  the  railway  by  giving  notice 
in  writing  four  years  in  advance.  This  charter 
also  provided  for  the  appointment  of  valuers  whose 
function  it  was  to  fix  the  price  of  the  transfer. 

Limitations  on  the  Life  of  Charters.  — The  preced- 
ing paragraph  illustrates  one  class  of  limitations 
placed  upon  some  charters  in  all  parts  of  the 
United  States.  While  a  majority  of  the  charters 
are  silent  upon  this  point,  now  and  then  charters 
were  granted  which  were  limited  in  their  existence 
to  a  certain  period  of  years,  varying  all  the  way 
from  ten  and  twenty  to  ninety-nine  or  more  years. 
One  of  the  powers  granted  in  the  charters  which 
do  not  contain  provisions  directly  limiting  their  life 
was  that  which  gave  to  the  board  of  directors  "  per- 
petual succession,"  which  means,  of  course,  a  fran- 
1  Laws,  1837,  p.  253,  §  22. 

69 


RAILWAY    LEGISLATION 

chise  unlimited  in  the  period  of  its  existence.  In 
the  Northwestern  States  a  few  charters  were 
granted  limiting  the  life  of  the  corporation  to  fifty 
and  sixty  years.  Florida  granted  a  few  which  were 
to  lapse  after  a  period  of  twenty  years  ;  Louisiana, 
after  forty  and  fifty,  and,-  in  one  instance,  twenty- 
five.  In  one  charter,  a  provision  is  found  that  after 
a  certain  number  of  years  the  same  shall  expire, 
and  the  assets  of  the  corporation  shall  be  distrib- 
uted among  the  stockholders.  The  session  laws 
of  the  different  states  contain  numerous  acts  ex- 
tending the  charter  period  in  those  cases  where 
the  original  act  contained  time  limits ;  and  it  is 
obvious  that  in  all  those  instances  in  which  the 
charter  reserved  to  the  legislature  the  right  to 
purchase,  no  time  limit  whatever  was  necessary. 
Limitations  on  the  Power  of  Taxation.  —  After 
the  country  at  large  had  begun  to  realize  the  neces- 
sity and  importance  of  railway  transportation,  vari- 
ous means  were  resorted  to  in  order  to  encourage  the 
construction  of  railways.  American  manufacturers 
were  unable  to  provide  the  necessary  material. 
This  had  to  be  imported  from  abroad,  hence  it  was 
but  natural  that  legislators  should  have  resorted 
to  the  expediency  of  exempting  from  import  duties 
materials  to  be  used  in  the  construction  of  rail- 
ways. But  the  railways,  after  they  had  been  con- 
structed, represented  valuable  property,  and  to 
that  extent  increased  the  taxable  resources  of  the 
territory  in  which  they  lay.  To  provide  against 
the  imposition  of  taxes  which  might  become  bur- 

70 


EARLY    RAILWAY    CHARTERS 

densome  or  even  discourage  the  construction  of 
railways,  legislatures  of  states  in  all  parts  of  the 
Union  incorporated,  in  some  charters,  a  provision 
limiting  the  power  of  the  respective  states  to  tax 
railway  property,  and,  in  a  considerable  number 
of  instances,  exempting  such  property  altogether 
from  taxation,  usually  for  a  limited  period  of  years. 
"  That  the  capital  stock  of  said  corporation  shall 
be  and  remain  free  from  taxation  until  the  profits 
collected  by  said  railroad  corporation  shall  be 
sufficient  to  afford  a  dividend  of  five  per  cent  per 
annum  on  the  capital  stock."  This  is  from  a 
Connecticut l  charter  of  1833,  and  represents  anal- 
ogous provisions  found  in  New  England  charters 
of  that  period.  In  Massachusetts  some  charters 
exempted  railway  property  from  taxation  for  one 
or  more  years,  after  which  the  legislature  had  the 
right  to  levy  a  tax  not  exceeding  a  certain  sum, 
frequently  twenty-five  cents  per  annum,  on  each 
share  of  the  stock.  In  the  Northwestern  States 
isolated  charters  limit  the  power  of  taxation  to  a 
certain  per  cent  on  the  capital  stock ;  others  to  a 
certain  per  cent  on  the  net  income.  Then,  again, 
other  charters  make  railway  property  liable  to  taxa- 
tion like  all  other  property ;  and  late  laws  in  a  few 
of  the  Western  states  specifically  state  that  no 
railway  property  shall  be  exempted  from  taxation. 
State  Participation.  —  To  a  limited  extent  the 
individual  states  participated  in  the  construction 

1  Hartford  and  New  Haven,  passed  in  1833.      Pr.  Laws,  1835- 
36,  p.  1002,  §  14. 

71 


RAILWAY    LEGISLATION 

of  railways,  either  by  becoming  stockholders  and 
lending  the  credit  of  the  state,  or  by  giving  direct 
financial  aid.  The  well-known  illustrations  of  the 
railways  owned  by  the  states  of  Georgia  and  South 
Carolina  and  the  city  of  Cincinnati  stand  quite 
alone  in  the  contemporary  railway  history  of  the 
United  States.  The  history  of  internal  improve- 
ments had  been  such  as  to  discourage  the  active 
participation  of  our  commonwealths  in  the  con- 
struction of  railways.  Works  of  internal  improve- 
ment, greatly  exceeding  both  the  capacity  to 
construct  and  to  utilize  them,  had  been  projected 
by  many  states.  The  inevitable  failure  of  these 
gigantic  projects  brought  these  states  into  disrepute 
as  active  economic  agents ;  hence  we  find,  in  con- 
stitutions and  charters  granted  after  this  period 
of  disaster  in  state  works  of  internal  improvement, 
direct  prohibitions  of  state  participation.  As  a 
matter  of  historical  interest,  however,  it  may  be 
well  to  notice  a  few  typical  instances  of  direct  or 
indirect  participation  of  the  state  in  building  up 
our  railway  system.  It  should  be  noted  that  the 
term  "  state  "  is  here  used  in  the  specific  rather 
than  the  generic  sense,  for  even  after  constitutional 
prohibitions  and  statutory  restrictions  had  become 
common,  the  smaller  political  units  —  county,  town, 
village,  and  city  —  freely  participated  in  railway 
enterprises.  Large  numbers  of  illustration  can  be 
found  in  nearly  every  state.  An  act  of  the  legis- 
lature of  Maryland,1  in  1827,  authorized  subscrip- 

1  Laws,  1827,  ch.  104. 
72 


EARLY    RAILWAY    CHARTERS 

tion  on  the  part  of  the  state  to  the  stock  of  the 
Baltimore  and  Ohio  Railway.  A  contemporary 
Michigan1  charter  empowers  the  state  to  take 
stock  in  the  company  chartered ;  likewise  in  case 
of  New  Jersey  ; 2  also  in  Arkansas 3  and  other  states 
in  the  Mississippi  Valley.  An  early  Indiana  4  charter 
limits  the  state  in  its  subscriptions  to  five  hundred 
shares,  and  in  Louisiana5  the  governor  is  author- 
ized to  subscribe  a  certain  amount  in  behalf  of  the 
state  after  a  certain  number  of  shares  have  actually 
been  paid  for  by  individuals.  In  turn,  the  governor 
may  appoint  one  director  to  represent  the  interests 
of  the  state.  It  is  important  to  notice  that  in  this 
representation  of  the  state  in  the  management  of 
railways  to  protect  the  financial  interests  of  the 
commonwealth  may  be  found  the  beginning  of 
attempts  at  administrative  control  of  our  railways. 
In  like  manner  the  board  of  internal  improvements, 
and  later  the  commissioner  of  railroads  appointed 
by  the  governor,  were  intrusted  with  the  interests 
of  the  state  in  the  control  of  railways  to  which 
Tennessee  had  given  aid.  Isolated  charters  in 
Wisconsin,  Michigan,  and  other  Northwestern 
States,  as  well  as  in  various  other  states,  authorized 
the  company  to  borrow  money  and  to  pledge  the 
credit  of  the  state  in  its  payment.  In  a  few 
states,  like  Wisconsin  and  Texas,  attempts  were 
made  to  utilize  the  school  fund  in  the  construction 

1  Laws,  1836,  p.  267,  §  21.  8  Laws,  1860,  p.  18. 

>2  Laws,  1832,  p.  376,  §  21.  4  Laws,  1832,  ch.  144,  §  24. 

6  Laws,  1833,  ch.  i. 

73 


RAILWAY    LEGISLATION 

of  railways,  on  the  plea  that  such  an  investment  of 
these  funds  would  be  carrying  out  the  provision 
of  the  law  directing  that  school  moneys  shall  be 
invested  in  the  most  profitable  manner.  In  the 
estimation  of  the  promoters  of  such  plans,  nothing 
could  be  more  profitable  than  the  railways  which 
they  had  projected. 

Miscellaneous  Provisions.  —  Under  this  head 
mention  will  be  made  of  provisions  found  in 
isolated  charters  in  states  in  all  parts  of  the 
country,  being  essentially  alike  in  substance, 
although  varying  in  the  form  of  expression  or 
exact  scope  of  their  contents.  During  the  early 
part  of  the  nineteenth  century  it  was  common  to 
organize  corporations  for  a  variety  of  purposes. 
Experience  soon  demonstrated  that  corporations 
which  divided  their  interests  and  their  energy 
among  two  or  more  enterprises  became  involved 
sooner  or  later  in  difficulties,  if  not  in  absolute 
failure.  As  a  result  of  this  experience  it  was  not 
long  before  state  legislatures  enacted  general  laws 
or  inserted  provisions  in  special  charters  to  the 
effect  that  corporations  shall  be  organized  only  for 
one  specified  purpose.  A  few  charters,  for  instance, 
were  granted,  which  authorized  the  construction  of 
a  railway,  as  well  as  participation  in  other  kinds  of 
business.  An  excellent  illustration  of  this  is  found 
in  the  title  of  the  Georgia  Railroad  and  Banking 
Company,  which  has  lasted  into  our  own  times. 
There  appears  to  have  existed  a  very  close  affilia- 
tion between  railroading  and  banking,  the  same 

74 


EARLY   RAILWAY    CHARTERS 

corporation  frequently  engaging  in  both  kinds  of 
business.  A  reaction  against  this  is  clearly  shown 
in  statutes  and  charter  provisions  prohibiting  rail- 
way companies  from  engaging  in  the  banking 
business.  Such  prohibitions  are  found  in  the  char- 
ters of  Alabama,1  Illinois,2  Kansas,3  Michigan,4 
Nebraska,5  Pennsylvania,6  South  Carolina,7  Florida,8 
Georgia,9  Wisconsin,10  and  other  states. 

The  route  of  the  railways  chartered  by  the 
various  acts  is  described  with  varying  degrees  of 
completeness  and  accuracy.  In  perhaps  the  great 
majority  of  charters  the  termini  and  a  few  lead- 
ing intermediate  points  are  named ;  in  others,  only 
the  termini ;  and  in  still  others,  nothing  more 
definite  than  the  expression  that  the  railway  in 
question  shall  be  constructed  between  some  eligible 
point  on  a  certain  river  to  another  eligible  point  on 
a  certain  lake  or  in  a  certain  township.  Instances 
are  recorded  in  which  projectors  solicited  aid  in  the 
construction  of  a  railway  along  one  route  and  then 
chose  another,  and  repeated  their  solicitations  for 
aid  along  the  second,  and  perhaps  secured  support 
from  both. 

The  amount  of  land  which  the  railway  company 
might  legally  hold  was  quite  generally  restricted 
to  that  which  was  necessary  for  construction  and 

1  Laws,  1849-50,  p.  190.          6  Laws,  1849,  no-  7& 

2  Laws,  1842-43,  p.  199.  7  Laws,  1835,  P-  4°9- 

8  Laws,  1857,  p.  7,  §  I.  8  Laws,  1849-51,  ch.  317,  §  19. 

4  Laws,  1848,  no.  199.  9  Laws,  1837,  p.  193. 

6  Laws,  1857,  p.  223.  10  Laws,  1847,  P«  23' 

75 


RAILWAY    LEGISLATION 

operation  —  a  strip  of  one  hundred  feet  in  width, 
and,  in  addition,  whatever  may  be  necessary  in 
order  to  secure  material  and  for  the  construction 
of  depots,  warehouses,  and  other  necessary  build- 
ings. In  many  of  the  states  the  right  of  way  was 
donated  to  the  company  ;  and,  of  course,  in  numer- 
ous instances,  state  and  federal  grants  were  given 
in  aid  of  railways.  But  to  provide  for  the  purchase 
of  the  necessary  land,  charters  usually  contain 
provisions  relating  to  eminent  domain  or  expropria- 
tion. Most  charters  name  some  officer  or  tribunal 
before  whom  cases  relating  to  condemned  property 
may  be  heard,  and  the  manner  in  which  decisions 
and  awards  may  be  made. 

The  capital  stock  of  the  company  was  usually 
named  in  the  charter,  although,  with  very  few  ex- 
ceptions, the  amount  of  the  capital  stock  appar- 
ently bears  no  relation  to  the  magnitude  of  the 
railway  in  question.  In  only  a  few  instances  does 
the  charter  fix  a  definite  ratio  between  the  number 
of  miles  of  road  and  the  amount  of  the  capital  stock. 
While  now  and  then  a  charter  does  not  provide  for 
the  payment  of  anything  whatsoever  at  the  time 
subscriptions  are  made,  or  calls  for  only  a  dollar 
or  two,  in  a  large  number  of  charters  a  payment 
of  five  dollars  is  called  for  at  the  time  subscribers 
enter  their  names  on  the  books  of  the  company. 
Usually  the  manner  in  which  the  balance  shall  be 
paid  is  indicated,  and  the  number  of  days'  notice 
which  must  be  given  is  stated.  The  voting  power 
of  stockholders  is  quite  generally  limited  to  one 

76 


EARLY    RAILWAY    CHARTERS 

vote  per  share,  although  in  the  North  and  South 
Atlantic  States  the  graded  system  of  voting,  by 
which  the  number  of  votes  of  the  individual 
stockholder  decreases  as  his  holdings  increase,  is 
common. 

It  is  a  familiar  fact  that  our  early  railways  were 
built  for  short  distances  and  without  reference  to 
one  another,  and  that  our  present  magnificent  sys- 
tems are  but  consolidations  of  large  numbers  of 
smaller  roads.  We  are  not  surprised,  therefore,  to 
find  the  subject  of  consolidations  rarely  touched 
upon  in  early  charters.  To  be  sure  the  term  is 
used  ;  and  now  and  then  a  clause,  either  directly 
authorizing  or  prohibiting  consolidations,  was  put 
into  a  charter.  The  right  to  cross  other  railways, 
as  well  as  to  form  junctions,  was  frequently  granted  ; 
and  in  reality  such  a  right  can  easily  be  construed 
as  the  right  to  consolidate.  Similarly,  the  power 
to  operate  and  lease  other  railways  was  frequently 
given,  although  in  the  Southern  States  the  term 
"  farming"  is  sometimes  used. 

Most  later  charters  expressly  prohibit  the  leas- 
ing or  joint  operation  of  parallel  or  competing 
lines  ;  and,  in  numerous  early  charters,  compa- 
nies are  protected  against  the  construction  of 
parallel  lines,  either  within  a  certain  number  of 
years  or  a  certain  distance  from  their  own  roads. 

A  great  majority  of  charters  provide  for  an 
annual  report  in  one  form  or  another.  This  report 
is  most  frequently  made  by  the  board  of  directors 
to  the  stockholders ;  in  fewer  instances  to  the  legis- 

77 


RAILWAY    LEGISLATION 

lature ;  and,  in  still  others,  to  both  the  stockhold- 
ers and  the  legislature.  The  number  of  items 
specified  in  this  report  varies  all  the  way  from  less 
than  ten  to  more  than  one  hundred. 

Forerunners  of  laws  relating  to  safety  appliances 
and  the  protection  of  persons  and  property  can 
also  be  detected  in  early  charters.  Provisions  may 
be  found  relating  to  the  order  in  which  cars  shall 
be  put  into  a  train,  the  manner  in  which  crossings 
shall  be  protected,  bells  placed  upon  locomotives 
and  fences  built  along  tracks.  (It  is  a  matter  of 
curiosity  that,  in  some  of  our  earliest  charters, 
provision  is  made  for  the  construction  of  gates 
across  the  railway  tracks,  which  the  train  operators 
are  to  open  and  close  whenever  they  cross  the 
public  highways.) 

The  transportation  of  troops  and  munitions  of 
war  is  occasionally  provided  for ;  and  in  various 
Southern  States  railway  officers  are  expressly  ex- 
empted from  the  performance  of  military  duty.  In 
a  few  charters  the  power  of  the  company  to  own 
slaves  is  treated.  A  sinking  fund  is  also  men- 
tioned in  a  very  few  of  them. 

An  archaic  feature  of  our  charters  is  found  in 
the  provisions  relating  to  the  use  of  the  same  rail- 
way track  by  different  shippers,  and  the  rules  gov- 
erning the  construction  of  rolling  stock.  For 
example,  in  Massachusetts  J  a  corporation  was  au- 
thorized to  specify  in  its  by-laws  the  form  and  con- 
struction of  the  wheels,  and  the  weight  of  the 
1  Laws,  1826,  ch.  26,  §  6. 

78 


EARLY    RAILWAY    CHARTERS 

loads  which  should  pass  over  its  road.  This 
clause  had  directly  in  view  the  use  of  vehicles 
other  than  those  owned  by  the  corporation.  In 
several  charters  granted  in  the  Northwestern 
States  the  form  of  the  vehicles,  as  well  as  the 
price  to  be  charged  for  the  transportation  of  goods 
and  owners'  vehicles,  is  specified  in  the  charters. 
In  New  Jersey,1  it  is  provided  "  that  no  farmer  be- 
longing to  this  state  shall  be  required  to  pay  any 
toll  for  the  transportation  of  the  produce  of  his 
farm  to  market  over  the  said  road  or  roads,  in  his 
own  carriage,  weighing  not  more  than  one  ton, 
when  the  weight  of  such  produce  shall  not  exceed 
1,000  pounds,  but  the  same  farmer  may  be  charged 
toll  as  for  empty  carriage."  It  will  be  noticed  that 
the  term  "  toll "  is  here  used  to  designate  remuner- 
ation for  the  act  of  transportation,  while  the  term 
" expense"  or  "  cost  of  transportation,"  as  was 
noted  in  an  earlier  paragraph,  relates  more  partic- 
ularly to  remuneration  for  the  use  of  the  track,  and 
represents  a  contribution  to  the  fixed  charges  of 
the  road. 

1  Laws,  1831,  p.  100. 


79 


CHAPTER   II 
LATER  CHARTERS  AND  EARLY  GENERAL  LAWS 

General  Characteristics.  —  The  terms  "  early  " 
and  "late,"  used  with  reference  to  railway  char- 
ters, are  relative  in  their  significance ;  for  a  year 
which  is  early  in  the  history  of  one  state  may  be 
late  in  that  of  another.  For  instance,  charters 
granted  in  the  New  England  and  Middle  States 
between  1835  and  T^4°  mav  be  characterized  as 
later,  while  those  granted  in  states  like  Wiscon- 
sin and  Minnesota  dujing  those  years  would  de- 
cidedly belong  to  the  earlier  charters  of  that  section. 
The  legislative  history  of  railways  in  the  various 
states  of  the  Union  is  essentially  similar,  and  as 
we  observe  the  movements  of  this  legislation  from 
east  to  west  we  may  notice  that  in  turn  each  state 
goes  through,  in  the  main,  all  the  experiences  and 
stages  of  advancement  of  other  states  which  pre- 
ceded it  in  railway  development.  An  examination 
of  the  contents  of  these  charters,  as  one  observes 
their  march  westward,  clearly  indicates  the  fact 
that  the  restrictions  of  the  earlier  types  granted  in 
the  East  are  gradually  made  milder,  if  they  are  not 
altogether  lost.  Occasionally  there  is  a  reversion 
to  type  —  a  Western  charter  embodying  all  the 

80 


LATER    CHARTERS 

salient  restrictions  and  regulating  features  of  the 
severest  Eastern  charters.  The  additional  obser- 
vation may  be  made  that  the  maximum  rate 
provisions,  which  are  rather  common  in  the  earlier 
charters  of  the  East  and  Middle  West,  are  fre- 
quently embodied  in  later  charters.  Then,  as  time 
advances  and  the  more  modern  phases  of  rail- 
roading make  their  appearance,  clauses  referring 
to  consolidations,  discriminations,  and  even  long 
and  short  haul  are  occasionally  inserted.  Aside 
from  the  enumeration  of  names  comprising  the 
board  of  commissioners,  which  usually  appears  in 
the  first  or  second  section  of  the  charter,  no  reg- 
ular order  is  maintained. 

It  is  clear  that  states  copied  largely  from  one 
another,  and,  in  the  process  of  copying,  different 
charter  sections  appear  to  have  become  badly 
mixed ;  and  in  numerous  instances  a  considerable 
number,  even  a  majority,  of  clauses  incorporated 
in  the  more  complete  charter  which  served  as  the 
model  are  left  out  altogether. 

While  large  numbers  of  special  charters  were 
granted  up  to  1870,  general  laws  relating  to  rail- 
ways appeared  early  in  the  thirties,  and  in  a  few 
isolated  oases  even  before  that  time.  A  custom 
which  aided  in  bringing  about  the  transition  from 
special  to  general  laws  was  the  abbreviation  of  rail- 
way charters  by  reference  to  previously  granted 
charters  in  the  same  or,  in  isolated  cases,  in  other 
states.  Under  this  custom  the  charter  only  con- 
tained a  few  purely  individual  and  local  specifica- 
G  81 


RAILWAY    LEGISLATION 

tions,  with  the  additional  blanket  provision  that 
the  company  thereby  incorporated  shall  enjoy  all 
the  rights  and  privileges  previously  granted  to 
another  specified  corporation.  Thus,  in  New 
York  numerous  charters  are  abridged  by  reference 
to  the  Attica  and  Buffalo  charter,1  granted  in 
1836.  The  same  method  was  largely  employed  in 
the  construction  of  charters  in  Maine,  Virginia,2 
Missouri,3  Minnesota,4  Tennessee,5  and  other  states. 
When,  as  was  often  the  case,  a  considerable  num- 
ber of  charters  were  abridged  in  the  same  state  by 
reference  to  some  one  charter,  an  element  of  uni- 
formity was  introduced  with  almost  as  much  effi- 
ciency as  if  general  laws  had  been  enacted. 

One  of  the  peculiarities  of  railway  legislation  in 
all  sections  of  the  country  is  the  granting  of  special 
laws  after  general  laws  had  been  enacted  in  the 
respective  states.  Indeed,  it  is  not  uncommon  to 
find  upon  the  statute  books  a  comprehensive  gen- 
eral law  enacted  on  a  certain  day,  and  perhaps  a 
special  charter  granted,  if  not  on  the  same,  then 
on  immediately  succeeding  days.  Large  numbers 
of  special  charters  were  granted,  completely  ignor- 
ing in  their  provisions  existing  general  laws. 

The  Northern  Pacific  Franchise. —  A  late  illustra- 
tion of  the  organization  of  a  railway  company 
under  special  charter  is  afforded  by  the  history  of 

1  Laws,  1836,  p.  319. 

2  Laws,  1839,  ch.  107,  p.  74,  and  charters  granted  subsequently. 
8  Laws,  1837,  P-  247-  4  Laws,  1857,  ch.  53. 

5  Laws,  1851-52,  ch.  103,  192,  and  others. 
82 


LATER    CHARTERS 

the  Northern  Pacific  Railroad,  the  leading  facts  of 
which  are  set  forth  by  the  general  counsel  of  that 
company  in  the  preface  to  his  compilation  of  the 
Northern  Pacific  charters. 


" PREFACE 

"Soon  after  the  institution  of  the  foreclosure 
proceeding  it  was  determined  that  it  would  be  nec- 
essary to  reorganize  the  Northern  Pacific  Railroad 
Company  under  a  new  charter,  to  be  obtained  either 
from  Congress  or  from  some  one  of  the  states. 
Congressional  legislation  was  considered  doubtful, 
and  the  reorganization  committee  early  took  steps 
to  secure  a  charter  for  reorganization  under  a  state 
law. 

"In  all  of  the  states  in  which  any  portion  of  the 
property  is  situated  the  granting  of  charters  by 
special  act  is  prohibited,  and  corporate  organiza- 
tion can  only  be  effected  under  general  laws.  Such 
a  constitutional  amendment  had  been  adopted  in 
Wisconsin  in  November,  1871,  but  the  supreme 
court  of  Wisconsin  had  several  times  decided  that 
the  amendment  was  prospective  in  its  operation, 
and  left  the  legislature  at  liberty  to  amend  special 
charters  granted  prior  to  the  adoption  of  the  con- 
stitutional amendment. 

"  It  was  considered  preferable  to  secure  a  special 
charter,  which  should  be  open  from  time  to  time 
to  special  amendment,  and  it  was  determined  that 
the  charter  of  the  Superior  and  St.  Croix  Railroad 

83 


RAILWAY    LEGISLATION 

Company  (a  Wisconsin  corporation)  would  be  the 
best  adapted  for  the  purpose.  This  charter  was 
acquired  by  the  purchase  of  all  the  stock  of  the 
company  and  was  amended  by  special  act  (ch. 
244,  Laws  of  1885)  of  the  legislature  of  Wiscon- 
sin, as  hereinafter  set  forth. 

"  As  the  reorganized  company  was  to  acquire  the 
vast  properties  of  the  Northern  Pacific  Railroad 
Company  and  to  issue  thereon  a  great  amount  of 
stock  and  bonds  in  order  to  carry  out  the  plan  of 
reorganization,  it  was  thought  prudent  to  leave 
unsettled  no  possible  question,  however  technical, 
based  upon  non-user  or  upon  any  other  ground, 
concerning  the  validity  of  the  charter.  To  test  the 
question  the  attorney-general  of  Wisconsin  applied 
to  the  supreme  court  of  that  state  for  leave  to  file 
in  the  court,  according  to  the  practice  thereof,  a 
bill  in  the  nature  of  a  quo  warranto  to  forfeit  the 
franchise  on  the  ground  of  non-user.  The  case  was 
fully  argued,  and  on  the  igth  day  of  June,  1896, 
the  supreme  court  unanimously  decided  that  the 
corporation  was  not  dissolved  by  non-user,  and  that 
if  any  ground  for  forfeiting  the  charter  had  existed 
it  was  waived  by  chapter  244  of  the  Laws  of  1895 
amending  the  charter  above  referred  to.  So  that 
before  the  purchase  of  the  properties  of  the  North- 
ern Pacific  Railroad  Company  and  the  increase  of 
its  capital  stock  and  the  provision  for  the  issue  of 
securities,  the  validity  of  the  charter  of  the  present 
Northern  Pacific  Railway  Company  (formerly  Su- 
perior and  St.  Croix  Railroad  Company),  by  the 


LATER    CHARTERS 

unanimous  decision    of   the   highest  court  of   the 
state,  had  become  res  adjudicate" 

The  Superior  and  St.  Croix  Railroad  Company, 
upon  the  basis  of  whose  charter  the  Northern  Pa- 
cific now  does  business,  was  granted  in  1870  and 
provided  for  the  construction  of  a  rather  short  and 
not  very  important  railway  in  the  northwestern 
part  of  the  state  of  Wisconsin.  The  road,  how- 
ever, was  not  built,  and  the  charter  provisions  were 
not  made  use  of.  A  few  unimportant  amendments 
were  adopted  in  1871,  and  in  1895  the  legislature 
of  Wisconsin  adopted  another  and  very  compre- 
hensive amendment  which,  together  with  the  orig- 
inal charter,  constitutes  the  present  franchise  of 
this  great  transcontinental  line.  The  amendment 
of  1895  describes  the  route  of  the  present  North- 
ern Pacific ;  it  gives  the  company  power,  among 
other  things,  "  to  receive  and  store  any  property 
in  any  of  its  depots  or  other  buildings,  including 
elevators  .  .  .  ;  to  demand,  collect,  and  receive 
such  sum  or  sums  of  money  for  the  transportation 
of  persons  and  property  and  for  the  storage  of 
property  as  shall  be  reasonable."  The  extension 
of  the  road  and  its  connection  with  other  lines  was 
not  directly  provided  for  in  the  charter  itself,  but 
the  general  laws  of  the  state,  as  amended  in  1897, 
grant  ample  powers  for  this  purpose  :  — 

"  Any  railroad  corporation  organized  and  existing 
under  the  laws  of  the  territory  or  state  of  Wiscon- 

85 


RAILWAY    LEGISLATION 

sin,  or  existing  by  consolidation  of  different  railway 
companies  under  the  laws  of  the  territory  or  state 
of  Wisconsin,  and  of  any  other  territory  or  terri- 
tories, state  or  states,  may  consolidate  its  stock, 
franchises,  and  property  with  any  other  railroad 
corporation,  whether  within  or  without  the  state, 
when  their  respective  railroads  can  be  lawfully 
connected  and  operated  together,  to  constitute  one 
continual  main  line,  with  or  without  branches,  upon 
such  terms  as  may  be  agreed  upon,  and  become 
one  corporation  by  any  name  selected,  which  within 
this  state  shall  possess  all  the  powers,  franchises, 
and  immunities,  including  the  right  of  further  con- 
solidation with  other  corporations  under  this  section, 
and  be  subject  to  all  the  liabilities  and  restrictions 
of  this  chapter,  and  such  in  addition,  including 
land  grants  and  exemptions  of  land  from  taxation, 
as  such  corporations  peculiarly  possessed  or  were 
subject  to  at  the  time  of  consolidation  or  amalga- 
mation by  the  laws  then  in  force  applicable  to  them 
or  either  of  them." 

The  Wisconsin  statutes,  like  those  of  most  other 
states,  as  will  be  noted  more  in  detail  later,  pro- 
hibit the  consolidation,  lease,  purchase,  or  control 
by  one  railroad  corporation  of  another  parallel  or 
competing  line,  to  be  determined  by  jury.  To 
complete  its  franchise  the  Northern  Pacific  filed 
this  charter  in  all  the  other  states  through  which 
it  runs,  and  appointed  certain  persons  as  its  legal 
representatives  in  those  commonwealths.  In  Idaho 

86 


LATER    CHARTERS 

a  special  promise  was  exacted  to  the  effect  that  the 
corporation  accepts  in  full  the  provisions  of  the  state 
constitution.  It  should  be  noticed  that  the  reorgan- 
ization of  the  Northern  Pacific  under  a  special  char- 
ter took  place  at  a  time  when  every  state  through 
which  its  lines  pass  had  on  its  statute  books  gen- 
eral laws  governing  the  organization  of  railway 
companies. 

The  physical  location  of  a  railway  is  by  no 
means  an  indication  of  the  source  of  its  legal  power, 
for,  as  in  the  case  of  the  Northern  Pacific,  a  great 
system  may  be  operated  on  the  basis  of  a  charter 
granted  to  an  insignificant  road  in  a  distant  state. 
The  Southern  Pacific,  for  instance,  is  organized 
under  the  laws  of  Kentucky.  What  constitutes 
the  essence  of  the  legal  privilege  of  a  modern  rail- 
way corporation  is  an  extremely  complex  problem, 
the  difficulty  of  which  is  strongly  impressed  upon 
us  when  we  realize  that  scores,  if  not  hundreds, 
of  separate  charters  granted  by  different  states  are 
comprised  in  the  existing  franchises  of  our  great 
companies.  The  Pennsylvania  company,  for  in- 
stance, represents  more  than  a  hundred  and  fifty 
original  lines,  each  having  its  special  charter  or  cer- 
tificate of  incorporation.  Many  of  these  charters 
represent  conflicting,  if  not  mutually  exclusive  priv- 
ileges, and  what  the  charter  rights  of  such  a  corpo- 
ration are  is  a  question  difficult  of  solution.  Not 
only  is  there  a  possibility  of  conflict  between  the 
diverse  provisions  of  different  charters,  but  also 
between  the  charters  and  the  general  laws,  although 

87 


RAILWAY    LEGISLATION 

in  many  states  the  supremacy  of  general  over  spe- 
cial laws  has  been  at  least  acquiesced  in,  if  not 
publicly  recognized.  The  chairman  of  the  Massa- 
chusetts Railway  Commission  writes 1  that  in  that 
state  it  has  been  recognized  that  general  laws  have 
superseded  the  earlier  special  enactments.  This 
appears  especially  significant  when  we  remember 
that,  with  a  few  minor  exceptions,  all  the  railways 
of  Massachusetts  were  incorporated  under  special 
charters  —  a  compilation  of  which  makes  a  good- 
sized  volume  —  before  comprehensive  general  laws 
had  been  passed.  This  possibility  of  a  conflict 
between  special  and  general  laws  is  illustrated  in 
the  railway  history  of  Michigan.  The  legislature 
of  that  state,  in  1898,  created  a  commission  com- 
posed of  the  railway  commissioner  and  two  state 
officers  to  negotiate  with  certain  railway  companies 
of  the  state  operating  under  special  charters,  for 
the  purpose  of  ascertaining  upon  what  terms  the 
companies  would  be  willing  to  surrender  their  char- 
ters. While  the  question  of  the  amount  of  taxes 
these  companies  were  to  pay  was  the  immediate 
cause  of  this  action  on  the  part  of  the  legislature, 
a  similar  situation  with  respect  to  the  other  question 
is  by  no  means  an  impossibility.  No  further  refer- 
ence is  here  made  to  this  difference  between  the 
railways  and  the  state,  because  it  involves  the  ques- 
tion of  taxation,  which  constitutes  a  special  branch 
of  inquiry  too  large  for  treatment  in  this  place. 
Early  General  Laws.  —  In  the  chapter  on  early 

1  Private  correspondence. 
88 


LATER    CHARTERS 

charters  reference  is  made  to  a  law  of  Massachu- 
setts of  1808.  In  1833  l  the  legislature  of  that  state 
enacted  a  law  "  defining  the  rights  and  duties  of 
railway  corporations  in  certain  cases."  This  law 
was  included  in  a  larger  act  on  canals,  turnpikes, 
and  railroads.  The  law  of  1833  also  embodied 
the  idea  of  a  preamble  by  specifying  that  petitions 
for  the  construction  of  a  railway  shall  be  accom- 
panied by  the  report  of  a  competent  engineer. 
Connecticut,2  in  1849,  adopted  a  fairly  compre- 
hensive amendment  to  the  earlier  act  relating  to 
railroad  companies.  In  the  first  section  this  law 
provides  that  all  railway  companies  shall  be  sub- 
ject to  general  laws,  except  when  otherwise  spe- 
cially provided  for.  A  similar  provision  to  that 
found  in  Massachusetts  was  embodied  in  the  law 
providing  for  the  report  of  a  competent  engineer  in 
connection  with  the  petition  for  a  charter.  The 
usual  provisions  with  respect  to  organization,  shares 
of  stock,  location,  annual  reports,  and  other  finan- 
cial affairs  of  railway  companies  were  provided  for. 
In  Maine3  a  general  law  adopted  in  1841  contained 
the  following  section  :  "  No  petition  for  the  estab- 
lishment of  any  railroad  corporation  shall  be  acted 
upon  unless  the  same  is  accompanied  and  sup- 
ported by  the  report  of  a  skilful  engineer,  founded 
on  actual  examination  of  the  road  and  by  other 
evidence,  showing  the  character  of  the  soil,  the 
manner  in  which  it  is  proposed  to  construct  said 

1  Laws,  1833,  ch.  187  and  Rev.  Stat.,  p.  342. 

2  Laws,  1849,  ch.  37.  8  Rev.  Stat,  1841,  ch.  81. 


RAILWAY    LEGISLATION 

railroad,  the  general  profile  of  the  country  through 
which  it  is  proposed  to  be  made,  the  feasibility  of 
the  route,  and  an  estimate  of  the  probable  expense 
of  constructing  the  same.  The  petition  shall  set 
forth  the  places  of  beginning  and  ends  of  the  pro- 
posed railroad,  the  distance  between  the  same,  the 
general  course  of  said  railroad,  together  with  the 
names  of  five  towns  through  which  the  same,  on 
actual  survey,  may  be  found  to  pass."  This  pro- 
vision is  typical  of  analogous  clauses  in  the  laws 
of  other  North  Atlantic  states.  By  1848  Maine 
granted  charters  containing  only  a  few  sections, 
together  with  the  additional  statement  that  "  all 
the  privileges  and  immunities  usually  granted  to 
such  corporations  "  shall  be  delegated  to  the  com- 
pany thereby  formed.  New  Hampshire l  adopted 
a  general  law  in  1843  dealing  with  expropriation, 
crossings,  fences,  contracts  among  railway  com- 
panies, and  so  on.  The  year  following,  "  An  act 
to  render  railroad  corporations  public  in  certain 
cases,  and  constituting  a  board  of  railroad  commis- 
sioners "  was  adopted.  The  commission  estab- 
lished by  this  law  was  empowered  to  lay  out  routes 
on  petition  only,  to  inspect  roads  and  railway 
accounts.  Vermont  enacted  similar  laws  in  1846- 
47  and  1849,  tne  latter  being  quite  a  comprehen- 
sive general  law. 

New  York,  which  is  representative  of  the  Middle 

States,  had  passed  thirty  general  laws  before  1834, 

beginning  with  an  act  to  prevent  injury  to  railroad 

1  Laws,  1843,  ch«  X42» 

90 


LATER    CHARTERS 

property  and  insure  the  safety  of  passengers. 
These  laws  embraced  subjects  like  the  relation  of 
railroads  to  canals,  highways,  Indian  lands,  taxa- 
tion, maps  and  profiles,  contracts,  loaning  the 
credit  of  the  state,  carrying  mails,  junctions,  bag- 
gage checks,  altering  lines,  transportation  of  freight, 
suits  against  companies,  destruction  of  noxious 
weeds,  and  such  like.  A  law  of  1843  compelled 
railway  companies  to  report  annually  to  the  secre- 
tary of  state.  Like  the  New  England  states,  New 
York  declared  the  "  public  use  "  of  a  railway,  and 
demanded  proof  that  the  proposed  railway  was 
of  "  sufficient  utility  to  justify  the  taking  of  pri- 
vate property "  in  accordance  with  the  provisions 
of  the  general  law  authorizing  the  organization 
of  railway  companies.  By  1848  New  York  had 
worked  out  a  fairly  comprehensive  general  law, 
but  it  was  not  until  1850  that  what  may  be  called 
the  fundamental  law  of  the  state  was  adopted.  (The 
New  York  law  of  1850  was  transcribed,  with  the 
exception  of  a  few  sections  relating  to  the  Erie 
Canal,  by  the  legislature  of  Wisconsin  in  1853, 
which,  however,  failed  to  pass  the  bill.)  The  law 
of  1850  forbids  the  organization  of  corporations  by 
special  acts,  except  for  municipal  purposes  and  in 
cases  where,  in  the  judgment  of  the  legislature,  the 
objects  of  the  corporation  cannot  be  obtained 
under  general  laws.  In  addition,  it  contains  among 
others,  provisions  relating  only  to  the  organization 
of  railway  companies,  subscription  and  forfeiture 
of  stock,  transfer  and  increase  of  stock,  expropria- 

9' 


RAILWAY    LEGISLATION 

tion,  change  of  route,  filing  maps  and  profiles,  pay- 
ing labor  employed  in  construction,  formation  of 
trains,  baggage,  intoxication  of  employees,  annual 
report  of  over  one  hundred  items,  and  other  phases 
of  legislative  control. 

Notwithstanding  numerous  general  laws  the 
New  York  and  Erie  Railway  secured  17  amend- 
ments before  1850.  The  Portsmouth  and  Concord 
Railway  secured  i  amendment  during  each  of  the 
first  ten  years  of  its  existence.  The  Western 
Branch,  Massachusetts,  secured  22  amendments 
before  1853,  and  the  Eastern  Branch  secured 
1 8.  Thirteen  were  granted  to  the  Housatonic 
between  1838  and  1850;  the  Camden  and  Amboy, 
15;  the  Delaware  and  Raritan,  14.  The  Penn- 
sylvania adopted  22  up  to  1854,  and  the  Baltimore 
and  Ohio,  21  between  1828  and  1852.  Since  these 
amendments  dealt  with  such  topics  as  the  increase 
of  stock,  the  issuance  of  bonds,  holding  lands,  build- 
ing telegraphs,  extending  lines  and  forming  con- 
nections, the  construction  of  bridges,  and  so  on,  it 
is  obvious  that  a  single  comprehensive  law,  prop- 
erly observed,  would  have  answered  all  the  pur- 
poses, and  in  a  uniform  way,  of  all  the  special 
charters  with  which  the  various  legislatures  had 
to  concern  themselves.  Numerous  contemporary 
newspaper  paragraphs  can  be  found  deploring  the 
fact  that  legislatures  are  obliged  to  use  so  much 
of  their  time  for  the  construction  of  special  laws 
which  could  be  so  much  more  efficiently  dealt  with 
under  general  statutes. 

92 


LATER    CHARTERS 

Among  the  states  of  the  Middle  West,  Illinois 
began  early.  In  I8491  tne  legislature  of  that 
state  passed  "An  act  to  provide  for  a  general 
system  of  railroad  incorporations/*  This  law  pre- 
scribes the  formation  of  railway  corporations  and 
the  powers,  duties,  and  liabilities  of  officers.  The 
board  of  directors  is  given  full  power  over  rates, 
but  these  are  limited  to  three  cents  per  mile  for  pas- 
sengers, unless  otherwise  provided  for  by  special 
act  of  the  legislature.  The  legislature  is  empowered 
to  reduce  rates  without  the  consent  of  the  company, 
but  no  such  reduction  shall  cause  the  net  profits  to 
fall  below  fifteen  per  cent  per  annum.  The  probable 
use  of  the  proposed  railway  must  first  be  ascertained, 
and  the  interested  parties  must  be  given  an  oppor- 
tunity to  be  heard.  Annual  reports  are  demanded, 
and  the  act  is  to  apply  to  all  existing  corporations, 
so  far  as  the  same  is  not  in  conflict  with  special 
charters  granted.  The  legislature  of  Massachu- 
setts, in  1855,  adopted  a  comprehensive  general  law, 
including  provisions  on  legislative  control  of  rates, 
junctions,  taxing  capital  stock  one  per  cent  per 
annum,  providing  for  reasonably  good  service,  con- 
solidation, and  so  on.  However,  in  this,  as  in 
so  many  other  states,  during  succeeding  years 
charters  were  granted  by  the  legislature  which  are 
as  long  and  involved  as  if  no  general  laws  had  been 
in  existence.  Iowa2  passed  an  incorporation  law, 
providing  for  the  incorporation  of  railroads,  at  the 
first  session  of  its  general  assembly,  and  in  most 

i  Laws,  1 849,  p.  1 5.     2  Dixon,  "  State  Railroad  Control  in  Iowa,"  p.  20. 

93 


RAILWAY    LEGISLATION 

of  the  earlier  legislation  of  that  state  interference 
with  railway  management  is  foreshadowed.  A  law 
of  1856 1  contains  the  significant  provision  that 
"railroad  companies  accepting  the  provisions  of 
this  act  shall  at  all  times  be  subject  to  such  rules  and 
regulations  as  may  from  time  to  time  be  enacted." 
In  1860,  maximum  rates  were  prescribed,  and  two 
years  later  railways  were  required  to  maintain  offices 
within  the  state  and  to  submit  annual  reports. 
Another  law  provided  for  the  periodical  publi- 
cation of  rates  and  certain  provisions  relating  to 
safety. 

The  active  regulation  of  rates  was  attempted  in 
1866,  but  most  of  the  restrictive  laws  enacted  up 
to  this  time  were  rarely  enforced.  Kansas,  2  after 
most  prolific  crops  of  private  charters,  passed  an 
elaborate  general  law  in  1857,  but  within  three 
days  after  this  law  had  been  passed  a  special 
charter  was  granted  without  reference  to  the  act 
in  question,  although  covering  in  its  provisions 
matters  which  the  general  law  treated  very  elabo- 
rately. The  contents  of  this  rather  elaborate  law 
are  essentially  like  those  of  the  Illinois  law. 

Taking  North  Carolina  and  Alabama  as  repre- 
sentatives of  another  section  of  the  country,  it  may 
be  said  that  their  general  laws,  while  fairly  com- 
prehensive, are  not  as  complete  as  the  best  laws  of 
states  farther  north.  The  North  Carolina  law  of 
1 87 13  embraces  seventy  sections,  in  one  of  which 
a  maximum  rate  of  five  cents  for  passengers  is  pre- 

1  Dixon,  p.  21.        2  Laws,  1857,  p.  7.        3  Laws,  1871-72,  ch.  138. 

94 


LATER    CHARTERS 

scribed ;  another  calls  for  an  annual  report  of 
one  hundred  and  five  items,  and  another  prohibits 
consolidation  with  parallel  or  competing  lines. 
The  Alabama1  law  of  1850  reserves  to  the  legisla- 
ture the  right  to  alter  or  repeal  any  certificate  of 
incorporation  ;  it  places  a  limit  upon  the  indebted- 
ness which  the  company  may  assume,  and  contains 
furthermore  the  very  novel  provision  that  no  rail- 
road shall  be  constructed  through  an  orchard  with- 
out the  owner's  consent.  In  1853  all  railway  com- 
panies were  made  subordinate  to  general  laws. 

California  was  one  of  the  few  states  which  began 
to  legislate  on  railway  matters  in  general  rather 
than  special  acts,  beginning  with  1850.  In  1853  2 
a  law  was  passed  which  enabled  any  twenty- 
five  persons  to  form  a  railway  company.  The  life 
of  the  franchise  was  limited  to  fifty  years.  While 
section  2  of  the  law  specified  that  the  capital 
stock  of  the  company  shall  exactly  equal  the  actual 
cost  of  the  road,  section  16  empowered  the 
company  to  increase  its  capital  stock  "  to  any 
amount  which  may  be  deemed  sufficient  and  proper 
for  the  purpose  of  the  corporation/'  This  law  was 
amended  in  1853,  1856,  and  1857,  but  in  1861  3  the 
whole  of  it  was  repealed  and  another  law,  supplemen- 
tary to  the  original  general  act  of  1850,  was  adopted. 
An  important  provision  of  this  last  law  is  found  in 
section  i,  which  specifies  that  at  least  $1,000  per 
mile  shall  be  subscribed,  and  ten  per  cent  actually 

1  Laws,  1848-50,  p.  54.      2  Laws,  1853,  ch.  72. 
8  Laws,  1 86 1,  ch.  532. 

95 


RAILWAY    LEGISLATION 

paid  in  before  the  articles  of  incorporation  can 
be  filed.  The  form  of  the  articles  of  the  associa- 
tion is  prescribed,  and  the  period  of  its  existence 
limited  to  fifty  years.  A  sinking  fund  for  the 
redemption  of  bonds  is  provided  for,  and  the  un- 
usual liberty  of  laying  out  its  road,  "not  exceed- 
ing nine  rods  wide,"  is  given  to  the  company.  There 
are  elaborate  sections  on  eminent  domain,  arbitra- 
tion, tolls,  and  so  on.  By  a  vote  of  three-fourths  of 
the  constituents  of  the  companies,  consolidated 
railway  corporations  may  be  organized.  Maximum 
rates  of  ten  cents  per  passenger-mile  and  fifteen 
cents  per  ton-mile  are  prescribed,  although  the  com- 
pany cannot  be  compelled  to  undertake  the  trans- 
portation of  a  small  quantity  of  freight  for  less  than 
twenty-five  cents.  The  maximum  rates  of  the 
California  law  are  in  part  exceeded  by  those  pre- 
scribed in  a  Washington  charter  granted  in  I862,1 
which  are  ten  cents  per  passenger-mile  and  forty 
cents  per  ton-mile.  It  is  also  a  significant  fact 
that  the  first  general  law  enacted  by  the  legislature 
of  Washington,  in  1873,2  relates  to  "extortion  and 
unjust  discrimination  in  the  rates  charged  for  the 
transportation  of  passengers  and  freight  on  railroads 
in  this  territory."  Montana,3  Colorado,4  Arizona,6 
and  Idaho  6  are  other  states  which,  like  California, 
began  with  general  laws. 

1  Laws,  1862,  p.  119,  §  10.  8  Laws,  1873,  p.  93. 

2  Laws,  1873,  p.  455.  4  Laws,  1862,  p.  44. 
6  Acts  of  Territorial  Assembly,  1877,  p.  24. 

6  Laws,  1864,  On  Corporations. 

96 


CHAPTER   III 

CONSTITUTIONAL  PROVISIONS 

General  Considerations.  —  Constitutional  provi- 
sions probably  represent  the  more  fundamental 
and  permanent  features  of  railway  legislation.  It 
may  be  assumed  that  the  provision  incorporated  in 
the  constitutions  of  the  various  states  of  the  Union 
were  thought  to  represent  those  matters  respecting 
railways  which  the  people  of  the  different  states, 
represented  in  their  respective  legislatures,  con- 
sidered most  important  and  least  likely  to  require 
changes  in  the  future.  The  history  of  American 
constitutions  does  not  reveal  great  readiness  on 
the  part  of  the  people  to  change  or  modify  their 
organic  laws ;  and  in  view  of  this  slowness  in 
bringing  about  constitutional  changes  an  element 
of  fixity  and  rigidity  is  infused  into  the  legislative 
control  of  railways. 

The  constitutions  of  the  older  states,  as  a  class, 
contain  fewer  and  less  comprehensive  provisions 
relating  to  railways  ;  and  two  of  them,  Massachu- 
setts and  New  Hampshire,  embody  no  direct  pro- 
visions of  this  kind,  while  Rhode  Island  is  saved 
from  being  classified  with  these  two  states  by  a 
brief  and  rather  unimportant  constitutional  pro- 
H  97 


RAILWAY   LEGISLATION 

vision.  In  addition,  there  is  an  absence  of  clauses 
relating  to  railways  in  the  organic  codes  of  the 
territories  of  Arizona  and  New  Mexico.  With 
these  exceptions,  every  state  in  the  Union  con- 
tains more  or  less  elaborate  provisions  on  this 
subject,  varying  from  the  less  comprehensive  and 
incomplete  sections  of  many  of  the  constitutions 
of  the  older  states  to  those  much  wider  in  their 
scope  and  stringent  in  their  nature,  as  in  the  re- 
cently adopted  constitution  of  Montana. 

By  far  the  greater  part  of  the  contents  of  all  the 
constitutional  provisions  may  be  grouped  under 
three  general  heads :  first,  those  relating  to  incor- 
poration ;  second,  those  relating  to  public  aid,  and, 
third,  to  direct  regulation  and  control,  the  latter 
having  in  view  the  correction  of  abuses  and  the 
establishment  of  equitable  rates.  While  a  few  of 
these  provisions  are  negative  in  their  character,  a 
good  many  of  them  are  positive,  empowering  legis- 
latures to  establish  rates  and  to  do  other  things 
calculated  to  subordinate  the  agencies  of  trans- 
portation to  the  public  good. 

Acceptance  of  the  Constitution.  —  Fifteen  state 
constitutions  contain  provisions  to  the  effect  that 
no  railway,  canal,  or  other  transportation  company 
in  existence  at  the  time  of  the  ratification  of  the 
constitution  shall  have  the  benefit  of  any  future 
legislation  by  general  or  special  laws  other  than 
in  execution  of  a  trust  created  by  law  or  by  a  con- 
tract, except  on  the  condition  of  complete  accept- 
ance of  all  the  provisions  of  the  section  or  article 


CONSTITUTIONAL    PROVISIONS 

of  the  constitution  in  question.  In  a  few  in- 
stances the  further  provision  is  embodied  that  when- 
ever existing  charters  are  revised  or  amended,  the 
same  shall  become  subject  to  the  constitution.1 

Corporations  organized  under  General  Laws.  —  In 
the  chapter  on  Early  Railway  Charters  it  was  noted 
that  great  crops  of  special  charters  were  produced 
in  all  sections  of  the  country,  and  it  was  perhaps  a 
reaction  against  these  excesses  in  special  and  local 
legislation  which  led  to  the  adoption  of  constitu- 
tional provisions  prohibiting  the  organization  of 
railway  and  similar  companies  under  special  char- 
ters. One  method  of  avoiding  these  constitutional 
and  statutory  provisions  was  observed  in  the  case 
of  the  Northern  Pacific  Railway;  but  section  21 
of  the  original  charter  of  the  Superior  and  St. 
Croix  Railroad  Company  declared  "that  in  the 
judgment  of  the  legislature  of  this  state  the  ob- 
ject of  the  corporation  hereby  created  cannot  be 
attained  under  the  general  laws/'  The  later  con- 
stitutions of  the  Western  states  are  very  stringent 
in  this  respect,  and  the  organization  of  a  large 
class  of  corporations,  of  which  railways  are  an 
important  member,  under  special  acts,  is  rigidly 
prohibited.2 

1  The  constitutions  incorporating  such  provisions  are  found  in  Ala- 
bama, Arkansas,  Colorado,  Delaware,  Idaho,  Kentucky,  Louisiana, 
Mississippi,  Montana,  North  Dakota,  Pennsylvania,  South  Dakota, 
Texas,  Utah,  and  Wyoming. 

2  The  following  states  have  incorporated  such  prohibitions  in  their 
constitutions:   Arkansas,  California,  Colorado,  Delaware,  Florida, 
Illinois,  Idaho,  Indiana,  Iowa,  Louisiana,  Maryland,  Michigan,  Min- 

99 


RAILWAY    LEGISLATION 

Previously  granted  Charters.  —  Closely  allied  to 
the  last  type  of  constitutional  provisions  is  another, 
found  in  only  six  states,  which  invalidates  all  char- 
ters and  special  or  exclusive  privileges  granted 
before  the  adoption  of  the  constitution,  unless  or- 
ganization had  been  actually  effected.  Organiza- 
tion thereafter  could  not  be  effected  without  a  full 
acceptance  of  the  new  constitution.1 

Special  Charters.  —  In  addition  to  the  positive 
provision  that  railway  companies  shall  be  organized 
under  general  laws,  nineteen  constitutions  contain 
the  negative  clause  that  no  special  charters  shall  be 
granted,  except  for  charitable,  educational,  and  cer- 
tain other  purposes,  when  the  same  shall  remain  un- 
der state  control.  A  few  constitutions  specify  that 
special  charters  may  be  granted  to  corporations  and 
organizations  not  having  in  view  financial  gain.2 

Railways  Public  Carriers. — The  analogy  of  rail- 
ways to  common  roads  and  other  public  highways 
is  expressed  in  constitutional  provisions  declaring 
all  railway  and  canal  companies  to  be  common 
carriers.  While  provisions  bearing  on  this  topic 
are  differently  worded  in  the  different  constitu- 

nesota,  Missouri,  New  York,  North  Carolina,  South  Carolina,  Utah, 
West  Virginia,  Wisconsin,  and  Wyoming. 

1  This  is  found  in  the  constitutions  of  Arkansas,  California,  Colo- 
rado, Kentucky,  Idaho,  and  Wyoming. 

2  The  following  are  the  states  whose  constitutions  contain  such 
provisions :  Arkansas,  Colorado,  Idaho,  Kentucky,  Kansas,  Minne- 
sota,  Mississippi,   Missouri,  Nevada,  New  Jersey,  North    Dakota, 
Ohio,  Oregon,  South  Dakota,  Tennessee,  Texas,  Utah,  Washing- 
ton, and  Wyoming. 

100 


CONSTITUTIONAL    PROVISIONS 

tions,  sometimes  a  separate  section  being  devoted 
to  it,  and  in  other  instances  only  a  phrase  or  sen- 
tence embodied  in  another  section,  the  meaning  is 
usually  the  same ;  namely,  the  declaration  that  the 
railway  is  a  public  highway  and  that  railway  com- 
panies are  common  carriers.1 

Eminent  Domain  and  Public  Use.  —  Ever  since 
the  Supreme  Court  of  the  United  States  handed 
down  the  decision  of  Munn  v.  Illinois,  declaring 
that  whenever  a  person  devotes  his  property  to  a 
use  in  which  the  public  has  an  interest,  he  must 
grant,  to  the  extent  of  that  interest,  the  right  of 
the  state  to  control  that  property,  no  one  could 
consistently  question  the  public  nature  of  railways. 
This  fact  has  found  common  expression  in  the 
term  "  quasi  public,"  which  is  now  generally 
applied  to  railway  corporations.  A  large  number 
of  state  constitutions  declare  that  the  respective 
legislatures  may  take  the  franchise  and  property  of 
railway  companies  and  subject  the  same  to  public 
use,  when  the  general  welfare  requires  it,  in  the 
same  manner  in  which  the  property  of  individuals 
is  taken.  In  other  words,  these  states  reserve  in 
their  constitutions  the  power  to  exercise  the  right 
of  eminent  domain  over  all  the  corporate  property 
of  a  railway  company.2 

1  The  following  constitutions  contain  such  provisions :   Alabama, 
Arkansas,  Colorado,  Idaho,  Louisiana,  Mississippi,  Missouri,  Mon- 
tana, Nebraska,  North  Dakota,  Pennsylvania,  South  Dakota,  Texas, 
Utah,  Washington,  West  Virginia,  and  Wyoming. 

2  The  following  states  have  this  provision  :  Arkansas,  California, 
Colorado,  Idaho,  Illinois,  Kentucky,  Mississippi,  Missouri,  Montana, 

101 


RAILWAY    LEGISLATION 

Power  to  annul  Charters.  —  Sixteen  states  re- 
serve constitutional  power  to  alter,  amend,  revoke, 
or  annul  charters  granted  under  special  or  general 
laws,  whenever  in  the  opinion  of  the  legislature  it 
may  be  injurious  to  the  citizens  of  the  state  in 
question  to  continue  the  same.  Usually  the  addi- 
tional clause  is  incorporated  that  in  case  of  such 
repeal  or  revocation  no  injustice  shall  be  done  to 
the  members  of  the  corporation.1 

Public  Aid.  —  Even  after  the  downfall  of  the 
national  system  of  internal  improvements,  together 
with  the  failure  of  individual  states  to  make  such 
works  a  success,  subordinate  political  units  — 
counties,  towns,  cities,  villages,  etc.  —  extended 
aid  to  railway  companies  in  a  variety  of  ways,  the 
most  common  among  which  were  granting  the 
right  of  way,  making  cash  donations,  purchasing 
bonds,  or  becoming  stockholders,  loaning  the 
public  credit,  etc.  Provisions  relating  to  sub- 
scriptions to  stock  are  found  in  fourteen,  and  to 
loaning  of  the  public  credit  in  sixteen  constitutions.2 

Nebraska,  North  Dakota,  Pennsylvania,  South  Dakota,  Washington, 
West  Virginia,  and  Wyoming. 

1  Found  in  the  constitutions  of  Arkansas,  California,  Colorado, 
Idaho,  Iowa,  Kansas,  Mississippi,  Montana,  New  York,  North  Caro- 
lina, Oregon,  South  Dakota,  Utah,  Washington,  Wisconsin,  and 
Wyoming. 

2  The  former  including  the  following  states :  Arkansas,  Connecti- 
cut, Delaware,  Florida,  Idaho,  Louisiana,  Kentucky,  Mississippi, 
Missouri,  Oregon,  Pennsylvania,  Virginia,  Washington,  and  Wyo- 
ming; the  latter,  Connecticut,  Florida,  Louisiana,  Maine,  Mississippi, 
Nevada,  New  York,  North  Carolina,  —  excepting  a  few   specified 
cases,  —  Oregon,  Pennsylvania,  Texas,  Utah,  Virginia,  Washington, 

102 


CONSTITUTIONAL    PROVISIONS 

Intersections,  Jimctions,  and  Consolidations. — 
Varying  somewhat  in  the  number  of  subjects  speci- 
fied in  the  constitution,  eleven  states  make  pro- 
vision for  the  connection,  crossing,  and  intersection 
of  railways  and  interchange  of  traffic.  In  one  form 
or  another  it  is  prescribed  that  every  railway  shall 
have  the  right  to  intersect,  cross,  or  connect  with 
any  other  railway,  and  that  it  shall  receive  and 
transport  the  freight  and  coaches,  loaded  or  empty, 
of  every  other  railway,  without  delay  or  discrimi- 
nation. Closely  allied  to  the  subject  of  connections 
and  the  interchange  of  traffic  is  the  question  of 
consolidations,  and  constitutional  provisions  deal- 
ing with  both  subjects  are  found  in  several  states. 
The  most  common  form  in  which  the  traffic  ar- 
rangements of  the  different  roads  is  expressed  is 
that  which  permits  one  railway  to  lease,  control, 
purchase,  or  consolidate  with  any  other  railway, 
provided  that  the  other  is  not  a  parallel  or  compet- 
ing line.  To  what  extent  provisions  relating  to 
mere  interchange  of  traffic  would  permit  the  con- 
solidation of  competing  lines  is  not  clear.  Iso- 
lated provisions  prohibiting  the  stock  of  other 
railway  companies  may  be  found.1 

Wisconsin,  and  Wyoming.  Idaho  breaks  the  monotony  of  this  rule, 
in  that  it  prohibits  certain  political  units  from  becoming  stockholders 
in  all  joint  stock  companies,  except  "  railroad  corporations,  compa- 
nies, or  associations." 

1  Among  the  states  prohibiting  the  consolidation  of  competing 
lines  are :  Arkansas,  Colorado,  Illinois,  Kentucky,  Missouri,  Mon- 
tana, North  Dakota,  South  Dakota,  Texas,  Utah,  Washington,  and 
West  Virginia.    The  following  provide  for  junctions,  connections, 
I03 


RAILWAY    LEGISLATION 

Vote  of  Shareholders.  —  Only  nine  States  provide 
for  some  system  of  suffrage  on  the  part  of  share- 
holders, and  for  these  the  constitution  of  Illinois 
appears  to  have  served  as  a  model.  "  The  general 
assembly  shall  provide,  by  law,  .  .  .  the  right  of 
every  stockholder  to  vote,  in  person  or  by  proxy, 
for  the  number  of  shares  of  stock  owned  by  him, 
for  as  many  persons  as  there  are  directors  or  man- 
agers to  be  elected,  or  to  cumulate  such  shares, 
and  give  one  candidate  as  many  votes  as  the  num- 
ber of  directors  multiplied  by  the  number  of  his 
shares  of  stock  shall  equal,  or  to  distribute  them 
on  the  same  principle  among  as  many  candidates 
as  he  shall  think  fit."  * 

Free  Transportation. — The  granting  of  free  passes 
to  members  of  the  legislature,  state,  municipal,  and 
other  officers,  or  the  selling  of  the  tickets  at  a 
discount,  is  constitutionally  prohibited  in  Alabama, 
Arkansas,  California,  Florida,  Kentucky,  Missis- 
sippi, Missouri,  New  York,  Pennsylvania,  Wash- 
ington, and  Wisconsin.  The  constitution  of  Wy- 
oming also  treats  of  the  sale  of  unused  tickets  or 
parts  of  tickets. 

Regulation. —  The  establishment  of  tariff  sched- 
ules and  the  regulation  of  rates  are  treated  in  the 
constitutions  of  Georgia,  Mississippi,  Missouri, 

etc. :    Alabama,  Kentucky,  Idaho,  Louisiana,  Mississippi,  Missouri, 
Montana,  Pennsylvania,  South  Dakota,  Texas,  and  Wyoming. 

1  Found  in  the  following  constitutions  :  Delaware,  Illinois,  Idaho, 
Kentucky,  Mississippi,  Missouri,  Montana,  Nebraska,  and  West 
Virginia. 

104 


CONSTITUTIONAL    PROVISIONS 

Utah,  Washington,  and  West  Virginia.  The  legis- 
lature expressly  reserves  full  power  of  control  in 
addition  to  reservations  expressed  in  other  sections 
of  the  constitutions  of  Alabama,  Florida,  Idaho, 
Illinois,  Louisiana,  Nebraska,  South  Dakota,  and 
Wyoming.  Discrimination  against  persons  and 
places  or  industrial  sections  are  occasionally  directly 
prohibited  in  the  constitution.  The  form  in  which 
the  prohibitions  are  expressed  varies,  but  they  all 
have  in  view  the  equal  treatment  of  all  the  inter- 
ests affected  by  the  railway  service.1 

Pooling.  —  The  formation  of  trusts  or  combi- 
nations, and  the  making  of  contracts  restricting 
competition  or  having  in  view  the  control  of  prices, 
is  prohibited  in  ten  constitutions.2 

Miscellaneous. —  Only  a  few  states  provide  in 
their  constitutions  for  the  organization  of  adminis- 
trative bodies,  such  as  railway  commissions,  and 
the  powers  and  duties  of  the  same.  The  California 
constitution  not  only  prescribes  the  organization 
of  the  commission,  but  enumerates  the  more  im- 
portant powers  of  this  commission,  specifies  the 
manner  in  which  the  commission  shall  be  elected 
by  the  districts  into  which  the  state  is  constitu- 
tionally divided,  and  fixes  fines  for  violations  of  the 
law  on  the  part  of  railway  agents  or  employees. 

1  The  following   constitutions  contain   more   or  less   complete 
provisions  on  the  subject  of  discrimination:   Arkansas,  Colorado, 
Florida,  Georgia,    Idaho,  Illinois,   Kentucky,   Missouri,   Montana, 
Nebraska,  Pennsylvania,  Texas,  Utah,  Washington,  and  Wyoming. 

2  California,    Kentucky,    Idaho,    Mississippi,    Montana,    North 
Dakota,  South  Dakota,  Utah,  Washington,  and  Wyoming. 

I05 


RAILWAY    LEGISLATION 

Analogous  provisions  are  found  in  the  constitutions 
of  Kentucky  and  Louisiana.  The  constitutions  of 
Arkansas,  Missouri,  and  Pennsylvania  make  it 
unlawful  for  railway  officials  to  be  interested  in 
the  purchase  of  materials  and  supplies  for  the 
construction  of  a  railway.  The  constitutions  of 
Arkansas,  Kentucky,  and  Indiana  prohibit  the 
charging  of  a  greater  sum  for  a  shorter  distance 
over  the  same  line  in  the  same  direction  under 
similar  conditions.  Four  constitutions  —  Colorado, 
Kentucky,  Mississippi,  and  Montana  —  make  it 
unlawful  for  a  corporation  to  require  its  servants 
or  employees,  as  a  condition  of  their  employment, 
to  sign  a  contract  limiting  the  liability  of  the  com- 
pany in  case  of  suits  for  damage,  or  precluding  the 
possibility  of  bringing  such  suits  altogether,  by 
contract.  About  ten  constitutions  specifically  limit 
the  activities  of  a  chartered  corporation  to  the 
business  which  is  expressly  provided  for  in  the 
charter.  In  a  few  cases  the  constitutions  specify 
that  no  railway  company  can  become  a  foreign 
corporation  by  consolidation ;  and,  in  a  small  num- 
ber, a  provision  common  in  many  of  the  earlier 
laws  is  enacted,  compelling  railway  companies  to 
establish  stations  or  depots  whenever  they  pass 
within  a  certain  distance  of  towns  and  villages, 
frequently  the  county  seat.  The  constitution  of 
Washington  stands  alone  in  that  it  expressly  pro- 
hibits discriminations  against  express  companies. 
Idaho  and  Wyoming  demand  the  appointment  of 
legal  representatives  of  railway  companies  in  those 

106 


CONSTITUTIONAL    PROVISIONS 

States.1  The  Missouri  constitution  provides  for 
the  payment  into  the  state  treasury  of  specified 
sums  of  money  proportionate  to  the  amount  of 
capital  stock  before  a  charter  can  be  issued. 

This  analysis  presents  the  leading  features  of 
the  constitutional  provisions  of  the  several  states. 
None  of  importance  have  been  omitted  and 
only  a  few  of  the  less  important  ones  have  not 
received  mention. 

1  This  provision  is  common  in  general  laws  but  not  in  constitu- 
tions. 


107 


CHAPTER   IV 
PRESENT  GENERAL  RAILWAY  LEGISLATION1 

Terms  applicable  to  Later  Charters.  —  In  a  tech- 
nical sense  the  term  "charter"  can  scarcely  be 
applied  to  the  instruments  issued  to  railway  cor- 
porations under  contemporary  general  laws.  The 
word  "charter,"  through  long  usage,  has  come  to 
signify  a  special  grant  of  authority  and  power. 
In  the  constitutions  of  twenty-one  states,  as  was 
noticed  in  the  preceding  chapter,  the  incorporation 
of  railway  companies  under  special  or  local  acts  is 
prohibited  ;  in  other  states  this  prohibition  is  found 
in  general  laws,  and  in  some  states  in  both  the 
constitution  and  general  laws.  The  statutes  of 
South  Carolina  mention  the  organization  of  rail- 
way companies  "  under  charters,"  and  in  the 
Kansas  statutes  the  term  "  charter  "  is  also  used. 
But  these  are  exceptions.  Terms  like  "  articles  of 
association,"  "certificate  of  incorporation,"  "arti- 
cles of  incorporation,"  "  articles  of  agreement," 
and  " letters  patent"  have  come  into  use,  and 

1  This  chapter  is  based  on  the  latest  Revised  Statutes  of  the 
several  states,  and  General  Laws  enacted  since  the  publication  of 
such  statutes  when  the  Revised  Statutes  were  not  up  to  date.  To 
specify  references  to  statutes  in  detail  would  unduly  burden  this 
book  with  foot-notes. 

1 08 


GENERAL    RAILWAY    LEGISLATION 

carry  with  them  the  significance  of  earlier  special 
charters.  Articles,  certificates,  etc.,  are  charters 
only  in  a  loose  and  general  sense,  because  the 
contents  of  the  franchise  itself  are  expressed  in 
the  general  law  relating  to  railways  and  the  con- 
stitutional limitations  under  which  these  have 
been  exacted.  The  grant  of  a  charter  involves  a 
distinct  legislative  act  authorizing  the  company 
receiving  the  same  to  exercise,  in  a  measure,  the 
rights  of  sovereignty,  and  to  do  the  things  for 
which  the  organization  was  accomplished.  A  cer- 
tificate of  incorporation,  on  the  other  hand,  is 
issued  in  pursuance  of  law  by  administrative  and 
not  by  direct  legislative  authority.  Formerly 
a  separate  act  of  the  legislature  was  necessary. 
Under  general  laws  an  administrative  act  for  each 
such  grant  of  power  is  all  that  is  requisite  for  the 
organization  of  a  railway  company.  To  be  sure, 
there  is  a  very  direct  connection  between  the 
earlier  charters  and  the  later  general  laws,  for 
many  of  the  latter  embody  not  only  the  essential 
features  of  the  former,  but  frequently  they  are 
expressed  in  similar  and  even  identical  language. 
The  change  of  name  to  article  or  certificate  did 
not  carry  with  it  any  radical  change  in  the  nature 
of  the  franchise.  In  this  respect  there  exists  con- 
tinuity of  development.  The  greatest  change 
brought  about  by  the  transition  from  special 
charters  to  incorporation  under  general  laws  con- 
sisted in  uniformity.  Almost  infinite  variety  in 
charter  provisions  was  common  during  the  earlier 
109 


RAILWAY    LEGISLATION 

period  of  special  legislation.  Under  general  laws, 
even  when  compliance  therewith  was  not  enforced 
or  enforceable,  a  certain  degree  of  uniformity  was 
brought  about  from  the  very  first. 

Conditions  under  which  Railway  Companies  may 
be  organized.  —  There  are  features  of  railway 
legislation  in  the  United  States  which  reveal 
many  elements  of  uniformity  as  to  the  condi- 
tions under  which  railway  companies  may  be 
organized ;  and  yet,  after  admitting  this  much,  we 
are  compelled  to  recognize  the  fact  that  railway 
laws  are  very  far  from  being  uniform,  and  that 
numerous  variations  and  differences  are  noticeable. 

The  number  of  persons  who  may  associate  them- 
selves for  the  purpose  of  incorporating  railway 
companies  varies  from  two  or  more  in  Washington 
to  any  number  in  Iowa.  Between  these  extremes 
there  exist  ten  different  numerical  groups  which 
may  effect  an  organization :  3  or  more  in 
Florida,  Oregon,  Montana,  and  Wyoming;  5  or 
more  in  Illinois,  Indiana,  Kansas,  Nebraska,  Wis- 
consin, Montana,  etc. ;  6  in  Louisiana ;  7  in  Mich- 
igan, Kentucky,  Alabama,  New  Jersey  (for  roads 
less  than  10  miles  in  length);  10  in  Maine, 
Georgia,  Arkansas,  Texas,  etc. ;  13  in  New  Jersey 
(for  roads  more  than  10  miles  in  length);  15  in 
New  York,  Indiana,  etc. ;  20  in  Vermont ;  25  in 
Massachusetts,  New  Hampshire,  etc.  These  num- 
bers, or  more,  may  in  some  states  be  composed  of 
any  persons  whatsoever ;  in  others  a  certain  pro- 
portion must  be  citizens,  and  in  a  few  all  of  them 

no 


GENERAL    RAILWAY    LEGISLATION 

must  be  citizens.  Certain  restrictions  are  occasion- 
ally made  with  respect  to  residence,  both  on  the 
part  of  the  stockholders  and  on  the  part  of  the 
board  of  directors  and  officers.  The  object  of 
restrictive  provisions  relating  to  residence  was 
evidently  to  prevent  the  projected  road  from  being 
controlled  by  "  foreign  influence."  During  the  early 
history  of  railways  in  the  United  States  the  possi- 
bility of  foreign  control,  on  the  assumption  that 
such  control  would  result  in  the  neglect  of  local 
interests,  was  used  as  a  weapon  to  encourage  local 
subscriptions  to  the  stock  of  railway  companies. 

Contents  of  the  Articles. — The  nature  of  the 
contents  of  the  articles  of  association,  or  certifi- 
cates of  incorporation,  can  best  be  indicated  by 
presenting  the  salient  features  of  such  articles  in  a 
few  of  the  leading  states,  which  may  be  considered 
typical  of  analogous  provisions  from  the  laws  of 
other  states,  understanding  by  the  term  "typical," 
not  identity,  but  essential  similarity,  leaving  room 
for  modifications  of  one  kind  or  another  in  particular 
cases. 

The  law  of  Illinois  requires  a  statement  of  the 
name  of  the  corporation  to  be  organized,  the  states 
from  and  to  which  the  railway  is  to  be  constructed, 
the  location  of  the  principal  offices,  the  time  of 
beginning  and  completing  construction  of  the  rail- 
way, the  amount  of  capital  stock,  and  the  number 
and  size  of  the  shares,  the  names  and  residences  of 
the  persons  who  contemplate  effecting  an  organi- 
zation, and  the  names  of  the  first  board  of  directors. 

in 


RAILWAY    LEGISLATION 

According  to  the  statutes  of  Maine,  the  arti- 
cles must  contain  the  name  of  the  corporation, 
the  gauge  of  the  projected  railway,  the  names 
of  the  places  from  and  to  which  the  same  is  to 
be  constructed,  the  amount  of  the  capital  stock, 
which  shall  be  not  less  than  $3000  per  mile  for 
narrow-gauge  and  $6000  for  standard-gauge  rail- 
ways, the  number  of  shares  of  stock,  and  the  names 
and  residences  of  five  directors.  Since,  on  this  point, 
the  laws  of  Maine1  are  in  many  respects  much 
better  than  those  of  most  of  the  states,  a  full 
quotation  is  here  inserted :  — 

"  Said  directors  shall  present  to  the  board  of 
railroad  commissioners  a  petition  for  the  privilege 
of  said  articles  of  association,  accompanied  with  a 
map  of  the  proposed  road,  on  a  proper  scale.  The 
board  of  railroad  commissioners  shall,  on  presenta- 
tion of  such  petition,  appoint  a  day  for  a  hearing 
thereon,  and  the  petitioners  shall  give  such  notice 
thereof  as  the  said  board  deems  reasonable 
and  proper,  in  order  that  all  persons  interested 
may  have  an  opportunity  to  appear  and  be  heard 
therein.  If  the  board  of  directors,  after  notice  and 
hearing  parties,  finds  that  all  the  provisions  (of 
law)  have  been  complied  with  and  that  public  con- 
venience requires  the  construction  of  said  railroad, 
said  board  shall  indorse  upon  said  articles  a  certifi- 
cate of  such  facts  and  the  approval  of  the  board  in 
writing.  The  secretary  of  state  shall,  upon  pay- 
ment of  $20  to  the  state,  cause  the  same,  with  the 

1  General  Laws,  1899,  p.  117,  sec.  I. 

112 


GENERAL    RAILWAY    LEGISLATION 

indorsement  thereon,  to  be  recorded,  and  shall  issue 
a  certificate  in  the  following  form." 

Then  follows  the  prescribed  form  of  certificate, 
with  the  contents  indicated  above. 

The  laws  of  Arkansas,  for  1899,  created  a  state 
board  of  railroad  incorporation,  composed  of  the 
governor,  who  acts  as  chairman,  the  attorney-gen- 
eral, auditor,  secretary  of  state,  treasurer,  and  com- 
missioner of  state  lands.  This  board  hears  all 
applications  for  certificates  of  incorporation,  and 
on  its  recommendation  such  certificates  may  be 
filed  with  the  secretary  of  state,  and  thus  legally 
empower  an  organization  to  construct  a  railway 
under  the  terms  of  the  general  laws  of  the  state. 
Ten  or  more  persons  may  organize,  elect  a  board 
of  directors,  and  subscribe  to  the  articles  of  asso- 
ciation when  $2000  per  mile  has  been  subscribed 
and  five  per  cent  of  the  subscriptions  paid  to  the 
board  of  directors,  a  majority  of  which  must  be 
citizens  of  the  state. 

The  laws  of  California  require  the  articles  of 
incorporation  to  state  the  name  of  the  projected 
corporation ;  the  purpose  for  which  it  is  to  be 
organized  ;  the  places  from  and  to  which  the  rail- 
way is  to  be  constructed,  as  well  as  all  intermediate 
branches  ;  the  estimated  length  of  the  road ;  the 
amount  of  the  capital  stock,  $1000  per  mile  of 
which  must  be  subscribed  before  the  articles  can 
be  filed,  and  ten  per  cent  actually  paid  in.  The 
number  of  directors  varies  from  five  to  eleven,  but 
five  of  them  must  be  residents  of  the  state.  The 
i  113 


RAILWAY    LEGISLATION 

sale  of  railway  franchises  by  municipalities  must 
be  advertised,  and  the  franchise  given  to  the  high- 
est bidder. 

Massachusetts.  —  The  articles  must  contain  the 
name,  route,  gauge,  capital  stock,  and  other  com- 
mon items.  In  case  of  standard-gauge  railways 
$10,000  per  mile  must  have  been  subscribed,  and 
for  narrow-gauge  $3000.  The  amount  of  the  capi- 
tal stock  depends  upon  the  detailed  estimate  of 
costs.  No  increase  in  capital  stock  can  be  made 
without  the  authority  of  the  railway  commission, 
before  whom  a  hearing  must  previously  have  been 
given,  upon  which  such  increase  or  refusal  to  per- 
mit such  increase  is  determined.  The  articles  and 
certificate  must  be  filed  with  the  secretary  of  state. 
All  petitions1  for  such  charters  must  be  accom- 
panied by  a  map  upon  a  proper  scale,  showing  in 
detail  the  entire  route  of  the  road.  A  "  certificate 
of  public  exigency"  is  also  required  before  a 
charter  can  be  granted.  The  railway  commis- 
sion, upon  due  notice,  must  give  a  hearing  to  all 
persons  interested  in  the  projected  railway,  and 
not  until  such  persons  have  been  given  an  op- 
portunity to  be  heard,  and  all  the  other  provisions 
of  the  law  complied  with,  can  a  charter  be  granted. 
It  will  be  noticed  that  the  Massachusetts  law  still 
provides  for  the  granting  of  special  charters,  al- 
though these  special  grants  are  surrounded  by 
wholesome  and  what  appear  to  be  entirely  ade- 
quate provisions  and  safeguards. 

1  Compare  the  laws  of  Maine. 
114 


GENERAL    RAILWAY    LEGISLATION 

Michigan.  —  Although  a  law  of  1891  of  this 
state  declared  every  railway  company  operating 
within  the  limits  of  the  state  "  to  be  in  all  respects 
subject  to  the  general  laws  of  the  state  respecting 
railroads,  as  now  existing  or  as  hereafter  amended," 
a  conflict  between  such  charter  provisions  and  gen- 
eral law  provisions  is  still  possible,  as  has  already 
been  indicated  in  another  connection.  Conse- 
quently, in  1889  there  was  created  in  this  state  a 
commission,  —  composed  of  the  commissioner  of 
railroads,  the  state  treasurer,  and  the  secretary  of 
state,  —  whose  duty  it  is  to  negotiate  with  railway 
companies  operating  under  special  charter,  to  de- 
termine upon  what  terms  such  railway  companies 
will  surrender  their  charter  rights.  For  this  pur- 
pose the  commission  is  given  authority  to  inquire 
into  the  business  of  railways,  to  secure  the  neces- 
sary information  by  subpoenaing  witnesses,  etc. 

Georgia.  —  In  addition  to  the  usual  provisions  of 
the  articles  of  incorporation  the  laws  of  Georgia 
provide  for  a  petition  which  must  be  presented  at 
least  four  weeks  before  a  charter  can  be  secured. 
Companies  may  amend  their  charters  by  adopting 
the  general  railway  laws  of  the  state. 

Significance  of  Certificates  and  Articles.  —  These 
articles  and  certificates  empower  railway  companies 
to  make  examinations  and  surveys  for  the  proposed 
railway,  in  order  to  select  the  most  advantageous 
route ;  to  purchase,  receive,  and  hold  an  amount  of 
real  estate  necessary  for  the  construction,  main- 
tenance, and  operation  of  the  road ;  to  own  other 


RAILWAY    LEGISLATION 

kinds  of  property  essential  to  railway  business ;  to 
have  perpetual  succession,  or  succession  for  a  cer- 
tain period  of  time ;  to  have  the  power  to  sue  and 
to  be  sued ;  to  establish  connections  with  other 
railways ;  to  charge  or  to  receive  such  remunera- 
tion for  their  services  as  from  time  to  time  may 
seem  reasonable ;  and,  in  general,  to  enjoy  those 
rights,  privileges,  and  immunities  which  the  law 
guarantees  to  all  similar  corporations,  and  which 
are  essential  in  carrying  out  the  legitimate  aims 
and  purposes  of  the  corporation.  The  complete- 
ness with  which  the  powers  and  duties  of  railway 
corporations  are  prescribed  in  different  laws  varies 
somewhat,  yet  there  exist,  perhaps,  greater  simi- 
larity and  more  completeness  in  this  respect  than 
in  any  other  subject  of  railway  legislation.  In  some 
states  corporate  powers  of  railway  companies  are 
enumerated  in  separate  laws ;  and,  in  others,  all 
the  leading  features  of  legal  provisions  relating  to 
railways  are  expressed  in  the  commission  laws.  It 
is  unnecessary  to  enumerate  in  the  lengthy  phra- 
seology of  the  law  books  the  detailed  rights  and 
privileges  of  railway  companies,  for  they  are  chiefly 
the  same  as  those  enjoyed  by  corporations  in  gen- 
eral, and  are  not  essential  to  a  consideration  of  the 
degree  of  regulation  and  control  which  is  possible 
under  the  existing  railway  laws  of  the  different 
states  of  the  Union. 

The  provisions  of  the  few  articles  which  have 
been  presented  above  are  sufficient  to  show  that 
there  exist  differences  among  the  states  with  re- 

116 


GENERAL    RAILWAY    LEGISLATION 

spect  to  the  time  limits  within  which  railways  may 
be  constructed  ;  the  amount  of  capital  stock,  and 
the  subscriptions  thereon  per  mile  of  railway ;  the 
degree  of  publicity  given  to  the  applications  for 
charters,  and  other  things.  A  fee  for  filing  cer- 
tificates is  charged  in  a  number  of  states.  For  in- 
stance, in  North  Carolina  $250  must  be  paid  before 
a  bill  can  be  introduced  to  incorporate  or  amend. 
In  Maine  a  fee  of  $20  is  exacted,  and  similar  fees 
are  charged  in  Wisconsin,  Washington,  and  other 
states.  The  laws  are  weak  in  the  financial  require- 
ments which  they  exact  of  railway  companies.  It 
would  seem  that  some  definite  proportion  should 
exist  between  the  amount  of  the  capital  stock  and 
the  length  and  characteristics  of  the  projected 
road ;  but  such  is  not  generally  the  case.  Idaho 
and  Indiana  require  a  subscription  of  $1000  per 
mile;  Kentucky,  $250  per  mile,  of  which  twenty 
per  cent  must  be  paid  in  cash ;  Arkansas,  $2000 
per  mile ;  Maryland,  ten  per  cent  payment  on 
shares ;  Virginia,  a  payment  of  $2  per  share  when 
subscriptions  are  made;  New  Jersey,  $10,000  per 
mile,  and  a  deposit  of  $2000  per  mile  when  the 
articles  of  association  are  filed,  which  latter  sum, 
however,  is  returned  to  the  board  of  directors  when 
the  road  is  completed.  This  is  sufficient  to  show 
existing  variations. 

Corporate  Life  arid  Reserved  Rights  of  the  State. 

-While  many  of  the  early  charters  and  general 

laws  were  unrestricted  in  their  nature,  it  was  not 

long  before  a  reaction  against  this  lack  of  restraint 

117 


RAILWAY    LEGISLATION 

set  in,  and  regulating  features,  more  or  less  ade- 
quate in  their  nature,  were  introduced  in  charters 
and  certificates.  Many  such  charters  contained  in 
one  of  their  concluding  sections  the  proviso  that  the 
charter  in  question  should  be  considered  a  public 
act,  and,  as  such,  to  be  construed  favorably  for  the 
purposes  for  which  the  company  was  organized. 
Both  in  England  and  the  United  States,  however, 
it  has  been  held  that  the  mere  insertion  of  such  a 
clause  does  not  make  a  special  or  private  law  a 
public  act,  and  that  unless  a  charter  is  public  by 
the  nature  of  its  contents  it  will  be  construed  as  a 
special  act  when  passed  with  reference  to  a  par- 
ticular company  organized  to  construct  a  certain 
road.  The  public  importance  of  railways  and  the 
vital  connection  between  them,  and  the  social 
and  economic  interests  of  the  states,  frequently 
led  legislators  into  a  good  deal  of  indulgence,  espe- 
cially during  the  early  period  of  railway  develop- 
ment. The  limitations  of  charter  rights  had  not 
yet  been  established ;  and  it  was  not  uncommon 
for  incorporators  to  maintain  that  the  rights  and 
privileges  granted  by  their  charter  were  absolute 
and  unrestricted.  Not  until  the  advent  of  Granger 
legislation,  culminating  in  the  leading  case  of 
Munn  v.  Illinois,  had  the  right  of  the  state  to  in- 
terfere in  the  management  of  railways  incorporated 
under  special  charters  been  established  ;  and  at  the 
present  time  nearly  two-thirds  of  the  states  have 
statutory  provisions  reserving  to  the  respective 
states  the  right  to  alter,  amend,  or  repeal  the  fran- 

118 


GENERAL    RAILWAY    LEGISLATION 

chise  of  any  corporation,  whether  organized  under 
special  or  general  law.  Reference  to  chapter  III,  on 
constitutional  provisions,  will  show  similar  limita- 
tions placed  upon  franchises  by  state  constitutions. 

The  nature  of  the  reserved  rights  of  the  states 
and  the  limitations  placed  upon  the  corporate  life 
of  railway  companies  are  illustrated  by  provisions 
in  several  states  here  inserted  :  — 

Maine.  —  The  laws  of  Maine  provide  that  "  no 
corporation  can  assign  its  charter  or  any  rights 
under  it ;  lease  or  grant  the  lease  or  control  of  its 
right  or  any  part  of  it,  or  divest  itself  thereof, 
without  consent  of  the  legislature."  In  addition, 
all  corporations,  whether  organized  under  special 
or  general  laws,  shall  be  subject  to  general  laws. 
In  Maine  and  Massachusetts  the  state  may  amend 
or  repeal  the  charter,  or  the  commonwealth  may 
purchase  railways  on  one  year's  notice  after  twenty 
years'  corporate  existence. 

Illinois.  —  In  Illinois  charters  are  granted  for 
fifty  years,  with  the  privilege  of  renewal  for  the 
same  length  of  time;  and  a  law  of  1895  reserves 
to  the  legislature  power  to  enact  laws  on  all  the 
leading  topics  relating  to  corporate  existence. 

Iowa.  —  In  Iowa  companies  may  likewise  be 
chartered  for  fifty  years,  with  the  privilege  of 
renewal  for  as  many  more,  and  they  shall  eventu- 
ally be  subject  to  legislative  control.  The  legis- 
lature may  alter,  abridge,  set  aside  the  charter,  or 
impose  new  conditions  which  it  deems  necessary 
for  the  public  good. 

119 


RAILWAY    LEGISLATION 

Kansas.  —  Special  charters  which  do  not  desig- 
nate the  period  of  corporate  life  continue  ninety- 
nine  years.  The  legislature  has  power  to  extend 
the  charter  period  as  it  may  deem  proper. 

Wisconsin. — The  legislature  of  Wisconsin  ex- 
pressly reserves  the  power  to  pass  laws  relating  to 
reasonable  maximum  rates,  the  correction  of  abuses, 
unjust  discrimination,  and  for  the  protection  of  the 
just  rights  of  the  public.  Corporations,  however, 
under  the  laws  of  this  state,  "shall  continue  per- 
petually." 

North  Carolina.  —  Sixty  years,  unless  otherwise 
provided  for  in  the  act  creating  the  same,  is  the 
corporate  life  under  the  laws  of  North  Carolina. 

Louisiana.  —  This  state  limits  the  corporate 
existence  to  ninety-nine  years. 

Texas.  —  In  Texas  a  charter  is  forfeited  if  ten 
miles  of  the  proposed  road  are  not  put  into  running 
order  within  two  years,  and  twenty  miles  during 
every  year  thereafter  until  the  road  is  completed. 
Charters  may  be  granted  for  a  period  of  fifty  years, 
with  the  privilege  of  renewal  for  an  equal  number 
of  years. 

Maryland  and  Rhode  Island  illustrate  an  entirely 
different  type  of  statutory  provision  :  — 

Rhode  Island.  — The  laws  of  Rhode  Island  pre- 
scribe a  course  of  procedure  which  appears  to  be 
entirely  in  harmony  with  the  needs  of  our  growing 
railway  and  industrial  systems.  In  that  state  the 
general  law  alters  special  charters  whenever  the 
latter  are  found  to  be  inconsistent  with  the  former, 

120 


GENERAL    RAILWAY    LEGISLATION 

Maryland.  —  Exactly  the  opposite  is  true  in 
Maryland,  where  the  adoption  of  the  "  general 
code'*  is  not  to  affect  the  rights  and  privileges 
granted  by  special  charters. 

Provisions  found  in  the  laws  of  all  the  other 
states  dealing  with  this  subject  at  all  do  not  con- 
tain anything  not  found  in  what  has  here  been 
presented.1 

Determination  of  route.  —  Under  early  railway 
methods  the  route  was  very  indefinitely  indicated, 
the  best  of  all  descriptions  being  frequently  con- 
tained in  that  clause  in  the  charter  naming  the 
termini  of  the  road ;  and  it  will  be  remembered 
that  not  all  of  the  termini  were  mentioned  in  some 
charters,  but  that  merely  certain  zones  thought  to 
contain  "  eligible  points  "  were  loosely  indicated. 
In  other  charters  not  only  the  termini  but  one  or 
more  important  intermediate  points  were  desig- 
nated ;  in  but  very  few,  often  insignificant,  charters 
was  the  entire  route  described  with  sufficient  defi- 
niteness  to  enable  one  to  tell  beforehand  exactly 
where  the  railway  would  be  constructed.  The 
course  of  a  railway  is  a  matter  in  which  the  public 
has  an  interest.  The  manner  in  which  the  right 
of  eminent  domain  has  been  exercised  has  de- 

1  States  having  statutory  or  constitutional  provisions,  or  both, 
directly  reserving  to  those  states  the  power  to  alter,  repeal,  or  amend 
charters,  are  the  following :  Arkansas,  California,  Colorado,  Indiana, 
Iowa,  Kansas,  Massachusetts,  Michigan,  Mississippi,  Montana,  New 
Hampshire,  New  York,  North  Carolina,  North  Dakota,  Oregon, 
Pennsylvania,  Rhode  Island,  South  Carolina,  South  Dakota,  Texas, 
Vermont,  Virginia,  Washington,  West  Virginia,  and  Wisconsin. 

121 


RAILWAY    LEGISLATION 

pended  very  greatly  upon  the  extent  of  the  public 
interest  in  the  railway  in  question.  Before  the 
charter  was  granted  to  the  Liverpool  and  Man- 
chester Railway  —  known  to  all  the  world  as  the 
first  important  modern  railway  —  every  piece  of 
land  to  be  crossed  by  the  proposed  railway  had  to 
be  described,  and  the  exact  location  of  the  entire 
line  definitely  determined  before  the  charter  was 
granted.  Such  a  mode  of  procedure  had  been 
practically  unknown  in  the  United  States  until 
more  recent  times.  Even  at  the  present  time 
great  competing  systems  quietly  send  out  their 
surveyors  to  gain  an  advantage  in  entering  new 
sections  or  in  constructing  lines  which  will  shorten 
the  route  between  important  competitive  points.  It 
is  not  uncommon  to  have  one  railway  build,  section 
by  section,  year  after  year,  until  finally  the  design, 
which  must  from  the  first  have  directed  the  move- 
ments of  the  constructors,  dawns  upon  the  public 
mind  and  the  real  significance  of  what  appeared  to 
be  perhaps  the  construction  of  a  subordinate  branch 
becomes  apparent.  This  may  or  may  not  be 
desirable ;  that  is  immaterial.  The  fact,  however, 
remains  that  important  public  interests  are  affected 
by  just  such  movements,  and  every  interest  which 
is  thus  liable  to  be  affected  should  have  an  oppor- 
tunity to  be  heard  before  such  important  industrial 
operations  are  undertaken.  No  state  in  the  Union 
has  legislated  in  this  respect  with  greater  care  and 
completeness  than  Massachusetts.  The  laws  of 
that  state  provide  that  the  termini,  together  with 


GENERAL    RAILWAY    LEGISLATION 

the  names  of  the  cities  and  towns  through  which 
the  projected  road  or  branch  is  to  run,  are  to  be 
given  with  as  much  certainty  as  the  nature  of  the 
case  will  admit.  The  articles  of  association  of  the 
company  fostering  the  project  must  be  published 
in  each  county  once  a  week  for  a  period  of  three 
weeks;  and  the  map  of  the  proposed  route,  to- 
gether with  the  report,  must  be  submitted  to  the 
mayor,  aldermen,  and  selectmen  of  the  different 
municipalities  affected.  Public  hearings,  after 
due  notice  to  all  persons  interested,  are  also  pro- 
vided for. 

In  Maine  the  railroad  commissioners  must 
approve  the  location  of  the  railway  before  con- 
struction is  begun.  Extensions  of  existing  lines 
may  be  built  on  application  to  and  approval  of  the 
commission.  Frequently  the  more  remote  states 
are  less  restrictive  in  such  matters ;  but  the  laws 
of  Arkansas  make  it  obligatory  for  the  company 
to  file  the  map  with  the  county  clerk  of  every 
county  through  which  the  proposed  railway  is  to 
be  run,  for  the  inspection  of  all  persons  interested. 
The  location  having  once  been  established,  no 
modifications  in  the  line,  exceeding  a  certain  dis- 
tance, are  permitted,  and  a  map  of  the  road,  to- 
gether with  such  modifications,  must  be  filed  with 
the  secretary  of  state.  One  of  the  most  important 
provisions  bearing  upon  this  question  is  found  in  a 
recent  law  (1899)  of  Tennessee,  which  prohibits 
one  railway  company  from  holding  exclusive  pos- 
session of  a  narrow  pass,  thus  preventing  another 

123 


RAILWAY    LEGISLATION 

railway  company  from  laying  its  tracks  through 
the  same.  If  the  pass  is  so  narrow  that  only  one 
track  can  be  laid,  joint  use  of  the  same  is  made 
mandatory  upon  the  road  which  has  built  through 
it.  No  point  named  in  the  articles  of  incorpora- 
tion can  be  avoided  under  the  laws  of  California. 
A  map  of  the  road  must  be  filed  with  the  secretary 
of  state  after  location.  Changes  in  the  line  must 
also  be  filed.  In  Connecticut  a  map  of  an  ap- 
proved route  must  be  filed  with  the  town  clerks  on 
a  prescribed  scale ;  and,  after  construction,  the 
lineament  of  the  road  can  be  changed  only  by 
permission  of  the  board  of  commissioners.  Florida 
charters  must  state  the  place  from  which  and  to 
which  the  road  is  to  be  constructed,  its  length,  and 
the  name  of  each  county  through  which  it  runs. 
However,  the  direction  of  the  road  may  be  changed 
by  a  vote  of  two-thirds  of  the  directors.  Similar 
provisions  are  found  in  the  laws  of  Georgia. 

In  a  number  of  states  maps  are  not  required  to 
be  filed  until  after  construction  has  begun  or  is 
completed,  or  within  a  year  after  the  road  has  been 
finished.  In  Indiana,  on  the  other  hand,  a  map 
must  be  filed  with  the  county  clerk  in  every  county 
named  in  the  articles  of  association  before  con- 
struction can  begin.  If  necessary,  the  route  may 
be  changed,  but  no  place  named  in  the  articles  is 
to  be  avoided.  Kansas  also  requires  the  filing  of 
a  map  with  county  clerks  before  construction  ;  and 
the  road  bed  may  be  changed,  but  not  the  general 
route.  The  map,  approved  by  the  president  and 

124 


GENERAL    RAILWAY    LEGISLATION 

secretary  of  the  railway  company,  the  attorney- 
general,  railway  commissioner,  and  secretary  of 
state,  must  be  filed  in  the  office  of  the  registrar  of 
deeds  under  the  laws  of  Michigan.  In  New  Hamp- 
shire the  railway  commission  reports  to  the  su- 
preme court  on  the  public  utility  of  the  proposed 
road,  and  a  map  of  the  same,  if  constructed,  must 
be  filed  within  one  year  after  the  railway  is  opened  ; 
and  the  railway  commissioner  may  authorize  a 
change  in  the  location  and  assess  damages  caused 
thereby.  The  New  York  railway  commission  has 
power  to  approve  or  disapprove  railway  projects ; 
persons  interested  are  given  a  hearing ;  and  a 
map  must  be  filed  before  construction  begins.  In 
North  Carolina  the  charter  must  be  filed  within  a 
reasonable  time  after  construction.  Petitions  must 
be  presented  to  the  "statutory  court"  if  the  pro- 
posed route  appears  objectionable  to  the  commis- 
sioners. To  alter  the  route  by  a  two-thirds  vote  of 
the  board  of  directors,  to  deflect  a  route  from  a 
certain  city  by  a  two-thirds  vote  of  the  council, 
are  the  privileges  enjoyed  by  railway  companies 
chartered  under  the  laws  of  North  Dakota.  In 
that  state  they  are  also  required  to  file  a  map  at 
any  time  within  six  months  after  definite  location 
has  been  decided  upon.  The  names  of  the  termini 
and  the  counties  through  which  the  proposed  rail- 
way runs  must  be  filed,  under  the  laws  of  Ohio. 
For  good  reasons  a  change  in  the  route  may  be 
made,  but  the  secretary  of  state  must  be  notified 
thereof,  and  all  subscribers  and  all  persons  who 

125 


RAILWAY    LEGISLATION 

subscribed  for  the  former  route  must  be  released 
from  their  obligations.  In  Wyoming  the  law 
simply  declares  that  railway  companies  may  exer- 
cise the  right  of  eminent  domain  in  locating  or 
relocating  lines.  This  was  a  common  provision 
in  early  charters,  under  which  railway  companies 
were  empowered  to  locate  and  to  relocate  the 
respective  roads  at  their  pleasure.  Approximately 
one-half  of  the  states  have  statutory  provisions 
governing  the  location  of  railways  ;  and  only  a  few 
cause  accurate  surveys  and  maps  to  be  made,  so 
that  the  exact  location  of  a  road  may  be  known 
before  construction  begins. 

Equipment. —  The  subject  of  safety  in  railway 
transportation  has  been  one  of  the  most  prolific 
sources  of  railway  legislation  in  recent  years. 
There  are  few  topics  about  which  so  many  differ- 
ent laws  have  been  passed,  and  perhaps  none  in 
regard  to  which  more  separate  acts  have  been 
approved  by  the  various  legislatures.  A  majority 
of  these  laws  relate  to  mechanical  appliances  and 
the  physical  condition  of  the  road,  while  numerous 
others  have  in  view  the  improvement  of  cars  and 
stations,  in  so  far  as  these  affect  the  comfort  and 
health  of  passengers.  Numerous  police  regula- 
tions also  appear  upon  the  statute  books  of  recent 
years,  relating  chiefly  to  subjects  like  stealing 
rides  on  trains,  shooting  at  trains  or  throwing 
missiles,  destruction  of  railway  property,  interfer- 
ence with  railway  signals,  destroying  tracks,  or 
other  things  affecting  the  safety  of  traffic.  A 

126 


GENERAL    RAILWAY    LEGISLATION 

movement  is  noticeable  to  encourage  the  abolition 
of  grade  crossings  and  to  guard  these  more  care- 
fully in  the  many  places  where  they  still  exist. 
Bringing  trains  to  a  stop  at  railway  crossings,  or 
permitting  them  to  pass  without  stopping  in  case 
interlocking  switches  are  used ;  the  construction 
of  switches  and  the  use  of  keys  for  the  same ;  the 
blocking  of  frogs,  in  order  to  prevent  feet  of  work- 
men from  being  caught  in  them ;  and  similar  sub- 
jects, relating  to  safety  in  the  construction  of 
tracks,  have  called  forth  numerous  recent  laws. 
An  old  and  ever-recurring  subject  for  legislation 
is  that  of  fences,  cattle  guards,  bells,  whistles,  etc. 
The  introduction  of  automatic  couplers  has  been 
greatly  promoted  by  the  legislatures  of  a  number 
of  leading  states,  as  well  as  the  use  of  continuous 
train  brakes.  In  a  few  laws  the  number  of  brake- 
men  for  every  train,  or  for  a  certain  number  of 
cars,  is  also  prescribed.  Several  laws  regulate  the 
question  of  precedence  among  trains.  In  almost  all 
states  laws  have  been  passed  regulating  the  speed 
of  trains  in  cities,  —  although  these  are  usually 
limited  by  municipal  ordinance,  —  in  crossing 
each  other's  tracks,  and  in  crossing  bridges.  In 
the  Southern  States  the  law  commonly  provides 
for  separate  coaches  for  white  and  colored  persons ; 
in  others,  the  heating  of  cars  and  coaches  is  made 
compulsory.  Fresh  water  must  be  supplied  at 
stations  and  in  coaches,  and  the  necessary  con- 
veniences for  personal  comfort  provided  on  trains 
and  in  railway  stations.  In  a  few  cases  the  laws 

127 


RAILWAY    LEGISLATION 

provide  for  the  examination  of  employees  and  the 
licensing  of  engineers,  and  prohibit  the  employ- 
ment of  persons  addicted  to  drink.  The  adequacy 
with  which  individual  states  deal  with  one  or  more  of 
these  topics  will  be  illustrated  by  the  summaries  of 
the  laws  upon  these  points  in  several  leading  states. 

Alabama.  —  Speed  of  trains  in  cities  regulated  ; 
fresh  water  supplied ;  separate  coaches  for  white 
and  colored  persons ;  conductors  may  assign  seats 
to  colored  persons  ;  employees  may  be  examined 
and  licensed ;  the  necessary  lights  shall  be  kept  on 
switches. 

Arkansas.  —  Separate  coaches  to  be  provided; 
officers  assign  seats  to  passengers  ;  fresh  water ; 
railways  responsible  for  baggage  forty-eight  hours 
after  arrival ;  the  rear  of  passenger  cars  to  be  kept 
clear. 

Connecticut.  —  Crossings  regulated  and  frogs 
locked  in  the  manner  prescribed  by  the  commis- 
sion ;  safety  couplers,  approved  by  railway  com- 
mission, required  ;  speed  of  trains  regulated  by  the 
commission ;  number  of  brakemen  varies  with 
speed  and  equipment  of  trains ;  fresh  water  to  be 
supplied,  and  engineers  sworn  to  obey  the  law. 

New  York.  —  Automatic  couplers  ;  automatic 
air  brakes  for  every  train,  sufficient  to  control 
train ;  railroad  commission  supervises  the  con- 
struction of  switches  and  signals  ;  tunnels  properly 
lighted  and  ventilated  ;  when  set-offs  are  used  in 
cars,  the  commission  may  approve  or  disapprove ; 
railway  crossings  according  to  law. 

128 


GENERAL    RAILWAY    LEGISLATION 

Ohio.  —  Automatic  couplers,  and  interlocking 
switches  at  grade  crossings,  subject  to  the  ap- 
proval of  the  commission  ;  commission  to  prescribe 
speed  of  trains  over  bridges  ;  crossings  constructed 
according  to  law ;  engineers  addicted  to  drink  not 
to  be  employed.1 

In  recent  years  the  commission  laws  of  different 
states  have  provided  for  the  reporting  of  accidents 
to  passengers  and  employees.  These  reports  are 
frequently  made  to  the  commission  in  the  forms 
prescribed  by  that  body.  In  some  cases  it  is  made 
the  duty  of  the  commission  to  investigate  railway 
accidents.2 

Quality  of  Service.  —  Legal  provisions  falling 
under  this  head  are  closely  related  to  the  topics 
discussed  in  the  section  immediately  preceding. 
Under  the  head  of  equipment,  however,  physical 
conditions  were  chiefly  considered  in  their  bearing 
upon  safety  in  travel.  Although  numerous  laws 
on  this  subject  have  been  enacted,  on  the  whole 
the  physical  side  of  railway  transportation  has 

1  In  addition  to  those  above   mentioned    the   following   states 
have  fairly  complete  statutory  provisions  on  these  subjects :   Illinois, 
Kentucky,   Maine,   Michigan,   Nebraska,  New  Hampshire,  Rhode 
Island,  South  Carolina,  Vermont.     Other  states,  of  which  the  laws 
are   less   complete   or   practically  wanting,   are :    Arizona,   Idaho, 
Kansas,  Louisiana,  Maryland,  Montana,  Nevada,  New  Jersey,  New 
Mexico,  North  Carolina,  Oregon,  Pennsylvania,  South  Dakota,  Ten- 
nessee, Texas,  Utah,  Virginia,  Washington,  West  Virginia,  Wiscon- 
sin, New  York. 

2  Among  the  commissions  that  have  power  to  investigate  acci- 
dents are  those  of  Massachusetts,  Connecticut,  Maine,  New  Hamp- 
shire, Rhode  Island,  New  York,  Ohio,  North  Carolina,  and  Virginia. 

K  129 


RAILWAY   LEGISLATION 

presented  fewer  difficulties  from  the  point  of  view 
of  regulation  and  control  than  many  others ;  be- 
cause the  immediate  self-interest  of  railway  com- 
panies made  the  prevention  of  accidents  necessary, 
and  for  this  reason  uninterrupted  progress  has  been 
made  in  the  application  of  those  appliances  which 
make  modern  railway  travel  so  very  safe  to  passen- 
gers and  constantly  less  and  less  dangerous  to  em- 
ployees. Recent  laws  compelling  the  introduction 
of  automatic  couplers  and  air  brakes  illustrate  this 
sufficiently.  In  the  present  paragraphs  relatively 
little  attention  will  be  paid  to  physical  conditions. 
These  will  be  assumed;  but  the  question  that 
directly  concerns  us  here  is  that  of  state  influence 
on  the  operation  of  trains  when  they  have  once 
been  put  into  service. 

Train  Service. — The  general  laws  of  nearly  all 
the  states  contain  a  more  or  less  definite  provision 
to  the  effect  that  trains  shall  be  run  "at  regular 
times  "  (to  use  the  phrase  of  New  York),  that  bul- 
letin boards  shall  be  put  up,  and  that  trains  running 
on  other  than  schedule  time  shall  be  duly  an- 
nounced on  these  boards.  About  one-fourth  of 
the  states,  however,  contain  more  definite  pro- 
visions, wider  in  their  scope,  and  looking  toward  a 
more  direct  control  of  the  train  service.  In  Alabama 
trains  may  be  made  to  stop  at  all  stations  adver- 
tised, and  at  county  seats.  Under  certain  conditions 
double-deck  cars  must  be  provided,  and  the  speed 
of  trains  in  cities  is  regulated.  On  petition  of  fifty- 
citizens  every  train  must  stop  in  the  city  of  the 

130 


GENERAL    RAILWAY    LEGISLATION 

petitioners,  according  to  the  laws  of  Arkansas ; 
bulletin  boards  must  be  provided  and  trains  run  at 
regular  intervals  ;  while  provisions  similar  to  those 
of  Alabama  govern  the  use  of  double-deck  cars. 
In  California  the  railway  company  may  regulate 
the  number  and  frequency  of  trains,  subject  to  the 
legislature.  Colorado  laws  compel  trains  to  stop 
in  cities,  and  give  railway  companies  the  power  to 
designate  loading  points.  At  these  points  cars 
shall  be  furnished  in  proportion  to  need ;  and,  in 
case  of  failure  on  the  part  of  the  railway  company 
to  provide  them,  for  one  reason  or  another,  an 
appeal  may  be  taken  to  the  railway  commission. 
The  laws  of  Connecticut  are  more  detailed  on  this 
topic  than  those  of  nearly  all  the  other  states.  On 
petition  of  twenty  citizens  the  railway  commission 
may  order  trains  to  stop  whenever  they  pass  within 
one  and  one-half  miles  from  a  village  ;  stations  may 
be  established  on  petition,  and  the  same  are  not  to 
be  discontinued  without  the  assent  of  the  commis- 
sion. Railway  companies  are  obliged  to  make 
proper  connections.  The  Florida  railway  commis- 
sion has  power  to  establish  train  schedules.  In 
Minnesota,  in  case  a  sufficient  number  of  cars  can- 
not be  provided  for  all  applicants,  the  same  shall 
be  distributed  proportionately  among  them.  North 
Dakota  railways  are  by  law  compelled  to  run  one 
train  each  way  on  each  week-day.  Power  to  con- 
trol time  tables,  and  consequently  the  frequency  of 
trains,  is  given  to  the  South  Carolina  commission. 
Up  to  1899  the  laws  of  Texas  provided  for  regu- 


RAILWAY    LEGISLATION 

lar  trains  once  per  day  in  each  direction ;  but  in 
iSQg1  a  law  was  passed  making  it  obligatory  to 
supply  cars,  without  preference,  to  applicants.  A 
shipper  applying  for  ten  cars  or  more  is  to  be 
furnished  with  them  in  three  days ;  if  the  call  is 
for  fifty  cars  or  more,  the  same  are  to  be  supplied 
within  ten  days.  As  a  protection  to  the  railway 
company  the  same  may  require  shippers  to  deposit 
one-fourth  of  the  freight  rate  on  the  contemplated 
shipment  as  a  condition  of  delivery  of  cars ;  and 
this  deposit  is  forfeited  in  case  the  cars  are  not 
loaded  within  forty-eight  hours.  In  addition,  the 
shipper  may  be  fined  for  actual  damages  sustained 
by  the  railway  company  for  his  failure  to  load  the 
cars  ordered  by  him. 

With  this  we  have  practically  exhausted  the  legal 
provisions  of  the  states  bearing  directly  upon  the 
frequency  of  the  trains  and  the  delivery  of  cars. 
Under  the  heading  of  discriminations  the  same  will 
be  indirectly  referred  to  ;  because,  as  is  well  known, 
failure  to  supply  cars  has  been  one  of  the  most 
common  forms  of  discrimination.  The  subject  of 
publicity  of  rates  will  indirectly  contribute  some- 
thing to  this  topic,  because  the  same  statutory  pro- 
visions dealing  with  one,  in  many  instances,  also 
deal  with  the  other.  The  question  of  rates,  being 
so  important,  will  be  taken  up  with  much  more 
detail  later  on,  and  for  that  reason  train  service 
and  the  publication  of  schedules  may  be  dismissed 
for  the  present. 

1  Laws,  ch.  48. 
132 


GENERAL    RAILWAY    LEGISLATION 

Through  Trains,  Routes,  and  Bills  of  Lading.  — 
Many  of  the  earlier  charters  and  practically  all  the 
later  charters  and  general  laws  provide  that  rail- 
way companies  shall  permit  connections,  junctions, 
and  intersections  with  other  lines.  Apart  from 
this  no  direct  attempt  was  made  to  control  through 
shipments  and  through  service  in  general.  This 
is  primarily  a  question  of  interstate  commerce  and 
largely  out  of  the  control  of  state  authorities.  The 
Interstate  Commerce  Commission  has  handed 
down  a  large  number  of  decisions  bearing  upon 
questions  of  through  rates,  routes,  and  bills  of  lad- 
ing, and  also  on  the  choice  of  routes  when  goods 
may  be  directed  over  different  ones  varying  in 
length  and  cost  of  transportation.  The  principle 
has  perhaps  been  well  established  that  railway 
companies  are  bound  to  obey  the  directions  of  the 
shipper,  and  that  without  explicit  directions  the 
shortest  and  least  expensive  route  possible  must  be 
chosen  for  the  consignment  of  goods.  The  legis- 
latures of  about  one-third  of  all  the  states  have 
touched  upon  this  subject  in  their  enactments,  and 
some  of  them  have  passed  fairly  comprehensive 
laws  upon  it.  The  laws  of  Connecticut  give  the 
railroad  commission  the  general  power  to  regulate 
the  exchange  of  passengers  and  baggage.  In 
Florida  other  railways  may  be  authorized  to  enter 
terminals  and  union  stations  of  competitive  lines, 
and  two  or  more  railways  in  the  same  town  may  be 
required  to  erect  union  stations.  In  addition,  the 
Florida  commission  has  the  general  power  to  order 


RAILWAY    LEGISLATION 

adequate  and  proper  railway  facilities.  In  case 
railways  send  goods  over  a  longer  route  when  a 
shorter  one  could  have  been  used,  no  more  shall  be 
charged  for  transportation  over  the  longer  line. 
The  laws  specify  that  transportation  shall  be 
directed  over  the  shortest  and  most  convenient 
route.  The  Georgia  railway  commission  has  power 
to  establish  joint  rates,  and  it  is  the  duty  of  this 
commission  to  investigate  through  rates,  and,  if 
necessary,  to  make  representations  before  the 
Interstate  Commerce  Commission.  Likewise,  in 
Iowa,  the  commission  may  establish  joint  through 
rates,  and  copies  of  such  joint-rate  schedules  made 
by  the  railway  company  shall  be  filed  with  this 
body.  The  Maine  law  of  1899  governing  leases 
and  contracts  expressly  provides  that  none  of  the 
provisions  governing  contracts  among  railways 
shall  be  construed  to  prevent  agreements  between 
such  corporations  "allowing  the  trains  of  one  to 
run  over  the  road  of  another,  both  corporations 
assenting  thereto."  Under  the  Minnesota  law 
joint  rates  may  be  established  on  demand,  and 
under  the  law  of  1899  ^e  railway  commission  is 
given  direct  power  in  establishing  joint  rates  upon 
such  important  objects  of  traffic  as  grain,  flax, 
lumber,  coal,  and  live  stock.  A  rather  stringent 
law  was  enacted  in  Missouri  in  1899.  It  gives  the 
railway  commission  power  to  order  close  connec- 
tions of  competing  lines,  when  such  connections 
will  not  cause  serious  injury  to  one  or  more  of  the 
roads  in  question  ;  and  in  case  of  refusal  on  the 


GENERAL    RAILWAY    LEGISLATION 

part  of  the  railway  companies  to  make  these  con- 
nections, under  conditions  determined  by  the  com- 
mission, a  fine  of  from  $500  to  $1000  may  be 
imposed.  Copies  of  all  contracts  for  joint  rates 
must  be  filed  with  the  Nebraska  board  of  trans- 
portation. The  corporation  commission  of  North 
Carolina  has  power  to  establish  through  rates  and 
to  approve  contracts  for  the  division  of  earnings 
in  such  cases.  The  law  of  North  Dakota  guaran- 
tees ample  facilities  for  transferring  freight  and 
passengers  from  one  line  to  another,  and  prescribes 
that  no  railway  company  shall  do  anything  which 
may  interfere  with  shipments  of  freight  from  being 
continuous.  In  1899  South  Carolina  enacted  a 
law  making  connections  compulsory,  and  providing 
that  the  expense  involved  in  making  such  arrange- 
ments shall  be  borne  ratably  in  accordance  with 
the  orders  of  the  commission.  Older  laws  provide 
for  through  bills  of  lading.  The  laws  of  Texas 
compel  the  railway  companies  to  receive  freight 
from  connecting  lines.  Penalties  are  imposed  for 
collecting  more  than  the  charges  specified  in  the 
bill  of  lading,  and  goods  are  to  be  delivered  on 
the  payment  of  the  amount  named  in  the  bill.  In 
Wisconsin,  on  complaint,  the  railway  commissioner 
shall  investigate  connections  made  between  rail- 
way companies,  and  if  he  thinks  the  case  of  suffi- 
cient importance  he  shall  bring  the  same  before  a 
board  composed  of  the  commissioner,  the  attorney- 
general,  and  the  governor,  who  shall  try  the  case 
and  make  a  proper  order  in  accordance  with  their 


RAILWAY   LEGISLATION 

findings.  Perhaps  a  half  dozen  additional  states 
have  laws  specifying  that  railway  companies  shall 
permit  an  interchange  of  business ;  that  track  con- 
nections shall  be  made  on  demand,  and  analogous 
provisions.  More  than  one-half  of  the  states,  it 
will  be  noticed,  have  thus  far  failed  to  provide  by 
law  for  matters  relating  to  through  traffic.  To 
what  extent  the  federal  law  on  interstate  com- 
merce, and  the  powers  given  to  the  Interstate 
Commerce  Commission,  makes  this  unnecessary  or 
undesirable,  lies  outside  the  province  of  this 
chapter. 

Consolidation  and  Pooling.  —  The  assumption  on 
which  state  and  federal  railway  legislation  largely 
rests  is  that  of  free  and  unrestricted  competition 
among  the  railways  of  the  country.  Provisions  on 
consolidation  were  rather  common  among  early 
charters,  and  are  almost  universal  in  case  of  later 
charters  and  general  laws.  Pooling,  whether  re- 
garded as  an  end  in  itself  or  as  a  stage  in  the 
growth  of  consolidations,  has  received  much  less 
attention  at  the  hands  of  state  legislatures  than 
discriminations,  for  more  than  one-half  of  the 
states  have  no  statutory  provisions  governing  pool- 
ing contracts  or  in  any  way  recognizing  them. 
Among  economic  students  it  is  a  familiar  fact  that 
railways  are  not,  like  many  other  industries,  sub- 
ject to  the  laws  of  competition ;  that  competition 
acts  only  within  narrow  limits  among  different  lines 
of  railways.1  But  the  accuracy  or  inaccuracy  of  the 

1  See  chap.  II,  Part  3. 

136 


GENERAL    RAILWAY    LEGISLATION 

assumptions  of  our  laws  is  not  the  problem  before 
us.  We  are  concerned  here  primarily  with  the 
statement  of  facts  in  regard  to  legislation  govern- 
ing railway  consolidations  and  pooling. 

Consolidations.  —  Legislation  under  this  head 
falls  into  two  groups.  On  the  one  hand,  those 
laws  which  either  directly  or  in  a  modified  form 
permit  consolidations  among  all  classes  of  railways, 
and,  on  the  other  hand,  laws  which  prohibit  con- 
solidation among  parallel  or  competing  lines  but 
permit  it  in  cases  of  continuous  lines  of  railway. 
In  a  number  of  states,  like  Michigan,  Maryland, 
Georgia,  and  Missouri,  laws  governing  the  consoli- 
dation of  continuous  lines  are  very  elaborate.  It 
is  common  to  specify  a  certain  number  of  days' 
notice  which  must  be  given  to  shareholders  when 
action  upon  consolidation  schemes  is  to  be  taken. 
The  number  of  votes  requisite  to  approve  the  con- 
solidation contract  is  usually  prescribed,  and  varies 
from  a  unanimous  to  a  majority  vote  —  a  two-thirds 
or  three-fourths  vote  of  the  stockholders  being 
most  common.  It  is  worth  while  briefly  to  indi- 
cate the  contents  of  a  few  typical  laws  of  this  kind. 

Georgia  permits  the  consolidation  of  continuous 
lines  and  the  leasing  of  other  railways,  but  all  con- 
tracts must  be  recorded,  and  suit  for  the  unlawful 
acquisition  of  railway  lines  may  be  brought  in  any 
country  through  which  the  same  runs.  Under  the 
statutes  of  Maryland  one  railway  company  may 
acquire  the  property  and  rights  of  other  railway 
companies,  but  articles  governing  such  acquisition 


RAILWAY    LEGISLATION 

and  control  must  be  filed  with  the  secretary  of 
state.  In  Michigan  these  contracts  have  no  force 
before  a  duplicate  copy  has  been  filed  in  the  office 
of  the  secretary  of  state  and  the  articles  of  consoli- 
dation have  been  submitted  to  and  approved  by  a 
board  consisting  of  the  attorney-general,  commis- 
sioner of  railroads,  and  the  secretary  of  state.  In 
Wisconsin  parallel  or  competing  lines  are  enjoined 
from  consolidating,  but  the  fact  whether  or  not 
such  lines  are  competitive  may  be  determined  by 
jury.  To  quote  the  laws  governing  this  topic  in 
full,  even  in  one  or  two  states,  would  unduly  in- 
crease the  length  of  this  chapter  without  adding 
anything  of  vital  importance  to  its  contents  ;  and  it 
may  therefore  suffice  to  give  a  brief  extract  from 
one  of  the  most  condensed  statutory  provisions  of 
this  kind:  "Any  railroad,  canal,  or  other  corpora- 
tion, or  the  lessee,  or  purchaser,  or  manager  of  any 
railroad  or  canal  corporation,  shall  consolidate  the 
stock,  property,  or  franchises  of  such  corporation 
with,  or  lease  or  purchase  the  works  or  franchises 
of,  or  in  any  way  control  any  other  railroad  or 
canal  corporation,  owning  or  having  under  its  con- 
trol a  parallel  or  competing  line ;  and  the  ques- 
tion whether  railroads  or  canals  are  parallel  or 
competing  lines  shall,  when  demanded  by  the  party 
complainant,  be  decided  by  a  jury  as  in  other  civil 
issues."  This  is  illustrative  of  the  provisions  in 
two-thirds  of  the  states.  Only  a  few,  like  Dela- 
ware, Oregon,  and  Rhode  Island,  are  silent  on  this 
point. 

138 


GENERAL    RAILWAY    LEGISLATION 

Coming  now  to  that  group  of  a  dozen  states 
which  permit  consolidation  within  limits,  attention 
may  be  called  to  the  laws  of  New  Jersey  under 
which  domestic  —  that  is,  state  railways  —  may 
consolidate,  but  consolidation  with  foreign  railways 
is  prohibited  except  with  the  consent  of  the  legisla- 
ture ;  and  a  law  of  1900  expressly  provides  that 
railway  companies  may  acquire  the  rights  of  other 
companies.  While  New  York  laws  prohibit  the 
consolidation  of  parallel  lines,  such  consolidation 
may,  nevertheless,  be  permitted  by  authority  of 
the  railway  commission.  New  York  provisions  for 
the  consolidation  of  continuous  lines,  like  those 
of  Ohio  and  Michigan,  are  extremely  elaborate.  In 
Massachusetts  the  consolidations  are  subject  to 
the  approval  of  the  railway  commission ;  and  in 
Florida  contracts  for  the  consolidation  of  compet- 
ing lines  are  ultra  vires  unless  approved  by  the 
commission. 

Without  duplicating  further  legal  provisions 
bearing  upon  both  types  of  consolidation,  the  lack 
of  uniformity  upon  this,  as  upon  so  many  other 
questions,  is  apparent.  When  we  view  the  facts 
of  railway  history,  the  steady  and  uninterrupted 
consolidations  which  have  absorbed  line  after  line, 
on  the  one  hand,  and  the  contemporary  existence 
and  growth  and  duplication  of  laws  attempting  to 
govern  these,  on  the  other  hand,  the  conclusion  is 
irresistible  that  somehow  these  laws  did  not 
accomplish  the  purposes  for  which  they  were  en- 
acted. The  wisdom  of  the  purposes  of  these  laws 


RAILWAY    LEGISLATION 

may  be,  and  is,  seriously  questioned  by  students 
of  railway  transportation ;  but  that  is  not  the 
problem  before  us.  We  are  concerned  simply 
with  the  facts  of  the  law,  and  these  facts  clearly 
and  unequivocally  reveal  a  wide  disparity  between 
the  provisions  of  law  and  the  facts  of  railway 
development. 

Pooling.  —  Both  the  interstate-commerce  act  and 
the  antitrust  law  prohibit  pooling.  The  Trans- 
Missouri  Freight  Association,  the  Joint  Traffic 
Association,1  and  other  cases  have  finally  decided 
the  illegality  of  all  combinations,  just  or  unjust, 
good  or  bad,  for  the  maintenance  and  control  of 
rates,  the  restraint  of  competition  or  the  arbitrary 
interference  in  any  other  way  with  the  free  play  of 
competitive  forces.  For  many  years  pooling  was 
a  favorite  and  one  of  the  most  efficient  agencies  in 
checking  destructive  competition  and  in  maintain- 
ing reasonable  rates  and  equitable  relations  among 
railways.  Less  than  one-half  of  the  states  have 
prohibitive  legislation,  directly  or  indirectly,  on 
the  subject  of  pooling,  and  only  about  a  dozen  pro- 
hibit this  practice. 

"That  it  shall  be  unlawful  for  any  common 
carrier  subject  to  the  provisions  of  this  act  to  enter 
into  any  contract,  agreement,  or  combination  with 
any  other  common  carrier  or  carriers  for  the  pool- 
ing of  freight  of  different  and  competing  railroads, 
or  divide  between  them  the  aggregate  or  net  pro- 
ceeds of  the  earnings  of  such  railroads,  or  any  por- 

1  See  pages  240-242. 
140 


GENERAL    RAILWAY    LEGISLATION 

tion  thereof ;  and  in  the  case  of  an  agreement  for 
the  pooling  of  freight  rates  as  aforesaid,  each  day 
of  its  continuance  shall  be  deemed  a  separate 
offence." 

In  words  identical  with  or  similar  to  these,  the 
pooling  of  freight  or  the  division  of  business  is 
prohibited  in  Arkansas,  California,  Iowa,  Kansas, 
Minnesota,  Nebraska,  North  Dakota,  South  Da- 
kota, and  Wisconsin. 

A  group  of  states,  a  little  smaller  than  the  one 
just  given,  contains  laws  bearing  less  directly  and 
rigidly  upon  pooling  contracts.  The  New  York 
law,  for  instance,  authorizes  the  railroad  commis- 
sion to  gather  information  on  contracts  and  agree- 
ments entered  into  between  railway  companies. 
The  laws  of  North  and  South  Carolina  make  it  the 
duty  of  their  respective  commissions  to  examine 
and  approve  or  disapprove  the  contracts  among 
railways.  In  Vermont  the  commission  is  charged 
with  the  prevention  of  unlawful  combinations  to 
increase  rates.  Similar  administrative  supervision 
of  contracts  is  provided  for  in  the  laws  of  Florida, 
Georgia,  New  Hampshire,  Texas,  and  Ohio.  More 
than  one-half  of  the  states  have,  consequently,  no 
laws  regulating  pooling. 

Tickets  :  Scalping,  Redemption  of  Unused  Tickets, 
Passes.  —  The  public  has  long  been  familiar  with 
arguments  for  and  against  ticket  brokerage,  com- 
monly called  scalping.  Irrespective  of  the  merits 
of  the  arguments  on  either  side,  the  fact  can  hardly 
be  disputed  that  scalping  may  seriously  reduce  the 

141 


RAILWAY    LEGISLATION 

revenue  of  railways,  become  an  agency  of  discrimi- 
nations and  other  abuses,  and  in  the  hands  of  weak 
roads  provide  the  latter  the  means  through  which 
they  may  dictate,  in  a  measure,  at  least,  to  the 
stronger  and  larger  systems.  In  all  but  a  dozen 
states,  ticket  brokerage  is  extra-legal ;  that  is,  the 
law  has  ignored  the  subject,  unless  we  unduly 
extend  the  meaning  of  such  general  provisions  as 
that  found  in  the  laws  of  California,  that  railways 
shall  provide  tickets.  In  Connecticut  the  railway 
commission  may  regulate  the  sale  of  tickets  and 
prescribe  hours  during  which  ticket  offices  may  do 
business.  South  Dakota  stands  alone  in  that  it 
expressly  authorizes  scalping.  "Any  person  hav- 
ing an  established  place  of  business  .  .  .  shall 
have  the  right  to  buy,  sell,  and  exchange  passage 
tickets.  .  .  .  Any  person  purchasing  a  ticket  from 
the  authorized  office  .  .  .  shall  have  the  right  to 
sell  his  ticket  or  tickets  to  any  person  doing  busi- 
ness under  this  act."1  Villages  and  cities  may, 
however,  regulate  this  business  by  law.  Not 
nearly  so  wide  in  its  scope  is  the  Alabama  pro- 
vision licensing  ticket  brokers  on  paying  a  fee  of 
$50  in  towns  of  10,000  or  over.  In  smaller  towns 
a  fee  of  $20  is  exacted.  In  Colorado  all  tickets 
are  transferable.  They  are  limited  as  to  time,  but 
not  as  to  person. 

On  the  question  of  free  transportation  and 
passes,  New  Jersey  occupies  a  position  as  unique 
as  that  of  South  Dakota,  in  that  the  laws  of  this 

i  Rev.  Stat,  1899,  §§  3950,  3951. 
142 


GENERAL    RAILWAY    LEGISLATION 

state  enumerate  certain  state  officers  who  shall  be 
permitted  to  ride  free.  Most  of  the  states  that 
have  legislated  on  scalping  have  in  the  same  act 
inserted  provisions  relating  to  the  redemption  of 
unused  or  unused  portions  of  tickets.  The  lists 
are  not  entirely  identical,  scalping  being  prohibited 
without  providing  for  the  redemption  of  tickets, 
and  vice  versa,  in  a  few  states.  The  nature  of 
legislation  of  this  kind  may  be  illustrated  by  the 
following : 1  — 

"  SECTION  I.  No  person  other  than  a  duly  author- 
ized agent  of  the  railroad  company  issuing  the 
same,  shall  sell,  offer  for  sale,  or  rent  any  railroad 
mileage  book  or  any  coupons  therefrom,  or  any 
other  railroad  tickets  limited  to  the  use  of  a  per- 
son or  persons  thereon  specified  at  the  time  of  its 
issuance  by  the  railroad  company,  under  a  penalty 
of  not  less  than  $10  nor  more  than  $100  for  each 
offence,  to  be  recovered  on  complaint. 

"  SECTION  2.  No  person  other  than  the  one 
specified  in  any  railroad  mileage  book  or  other 
railroad  ticket  limited  to  the  use  of  the  person  or 
persons  specified  thereon  at  the  time  of  its  issu- 
ance by  the  railroad  company,  shall  offer  for  pas- 
sage or  in  payment  for  transportation  on  any 
railroad  any  such  mileage  book  or  coupons  there- 
from, or  any  other  railroad  ticket  limited  as 
aforesaid,  under  a  penalty  of  not  less  than  $i  nor 
more  than  $10  for  each  offence,  to  be  recovered  on 
complaint. 

1  Laws  of  Maine,  1899,  ch.  69. 
H3 


RAILWAY    LEGISLATION 

"  SECTION  3.  Any  railroad  company  which  shall 
issue  a  mileage  book  limited  to  the  person  or  per- 
sons named  therein,  shall,  upon  presentation  thereof 
by  the  person  to  whom  such  book  was  issued  or 
his  legal  representatives,  at  some  one  or  more  of 
its  principal  stations  in  each  county  through 
which  its  road  runs,  to  be  designated  by  such 
company,  at  any  time  after  one  year  from  the  time 
when  such  book  was  issued,  redeem  all  the  coupons 
then  attached  to  such  book  at  the  same  rate  per 
mile  as  such  mileage  book  was  sold  at." 

A  similar  law  passed  by  the  legislature  of  New 
York  has  recently  been  declared  unconstitutional. 
Other  states  prescribing  the  sale  of  railway  tickets 
through  authorized  officers  are:  Florida,  Illinois, 
Minnesota,  Montana,  New  Jersey,  Iowa,  Texas, 
and  Pennsylvania.  In  Montana  the  railway  com- 
pany must  provide  its  agents  with  certificates 
which,  when  presented  to  the  secretary  of  state, 
entitle  the  holder  to  a  certificate  authorizing  him 
to  sell  tickets  for  the  railway  in  question  on  the 
payment  of  $i.  Selling  tickets  without  such  a 
license  is  unlawful. 

The  redemption  of.  unused  or  unused  portions  of 
tickets  has  been  provided  for  by  law  in  Pennsylvania 
since  1863.  Other  states  having  statutory  require- 
ments to  this  effect  are  Alabama,  Florida,  Illinois, 
Iowa,  Michigan,  and  Minnesota. 

Laws  governing  the  free  transportation,  or 
transportation  at  reduced  rates,  of  certain  persons 
or  classes  of  persons,  have  been  enacted  in  less 

144 


GENERAL    RAILWAY    LEGISLATION 

than  one-fourth  of  the  states,  most  of  these  mak- 
ing it  a  misdemeanor,  punishable  by  a  fine, 
forfeiture  of  office,  or  otherwise,  for  persons 
holding  public  offices  to  accept  passes  or  tickets 
at  rates  other  than  those  charged  to  the  public  at 
large.  Excursion  and  commutation  tickets  and 
reduced  rates  for  exhibitions,  fairs,  political  and 
other  gatherings  may  still  be  granted,  as  well  as 
special  favors  extended  to  charitable,  religious, 
reformatory,  and  other  institutions.  States  having 
legislated  on  this  topic  are  Alabama,  Arkansas, 
California,  Colorado,  Florida,  Massachusetts,  Mis- 
sissippi, Missouri,  North  Dakota,  Pennsylvania, 
Virginia,  Wisconsin.  In  most  of  these  the  law 
takes  the  form  of  positive  prohibition  of  the 
acceptance  of  passes  on  the  part  of  public  officials. 
In  1899  Minnesota  passed  a  law  making  it  obliga- 
tory for  railway  companies  to  grant  free  transporta- 
tion to  shippers  of  car-load  lots  of  live  stock.  Free 
baggage  is  expressly  provided  for  by  the  laws  of  a 
number  of  states,  150  pounds  being  the  usual 
exemption  on  first-class  tickets.  In  recent  years 
laws  declaring  bicycles  baggage  have  been  enacted 
in  a  number  of  states. 

Long  and  Short  Hauls.  —  With  the  exception  of 
discriminations  and  reasonable  rates,  there  is  no 
subject  which  the  decisions  of  the  Interstate  Com- 
merce Commission  touch  more  frequently  than  that 
of  long  and  short  hauls.  During  the  period  cov- 
ered by  its  first  annual  report  fifty-eight  petitions, 
representing  ninety-five  different  railways,  were 

L  145 


RAILWAY    LEGISLATION 

presented  to  this  body  for  relief  under  the  fourth 
section  of  the  interstate-commerce  law,  com- 
monly known  as  the  long  and  short  haul  clause. 
The  question  of  long  and  short  hauls  is  chiefly 
an  interstate  matter,  yet  nearly  one-half  of  the 
state  laws  contain  the  long  and  short  haul  pro- 
vision in  one  form  or  another,  that  used  in  the 
interstate-commerce  law  being  the  most  common. 
Among  the  states  prohibiting  a  greater  charge 
for  a  shorter  distance  included  within  the  longer 
for  transportation  in  the  same  direction  over  the 
same  line,  under  substantially  similar  conditions, 
ten  introduced  the  much  needed  element  of  elas- 
ticity in  that  the  respective  railway  commissions, 
or  other  authority,  may  permit  the  suspension  of 
the  long  and  short  haul  provision  in  certain  cases 
and  under  certain  conditions. 

"That  it  shall  be  unlawful  for  any  common 
carrier,  subject  to  the  provisions  of  this  act,  to 
charge  or  receive  any  greater  compensation  in  the 
aggregate  for  the  transportation  of  passengers  or 
of  like  kind  of  property,  under  substantially  simi- 
lar circumstances  and  conditions,  for  a  shorter 
than  for  a  longer  distance  over  the  same  line,  in 
the  same  direction,  the  shorter  being  included 
within  the  longer  distance ;  but  this  shall  not  be 
construed  as  authorizing  any  common  carrier 
within  the  terms  of  this  act  to  charge  and 
receive  as  great  a  compensation  for  a  shorter 
as  for  a  longer  distance :  Provided,  however, 
That  upon  application  to  the  board  appointed 

146 


GENERAL    RAILWAY    LEGISLATION 

under  the  provisions  of  this  act,  such  common 
carrier  may,  in  special  cases,  after  investigation 
by  the  board,  be  authorized  to  charge  less  for 
longer  than  for  shorter  distances  for  the  transpor- 
tation of  passengers  or  property ;  and  the  board 
may,  from  time  to  time,  prescribe  the  extent  to 
which  such  designated  common  carrier  may  be 
relieved  from  the  operation  of  this  section  of  this 
act. 

"  No  railroad  corporation  shall  charge  or  receive 
for  the  transportation  of  freight  to  any  station  on 
its  road  a  greater  sum  than  is  at  the  time  charged 
or  received  for  the  transportation  of  the  like  class 
and  quantity  of  freight  from  the  same  original 
point  of  departure  to  a  station  at  a  greater  dis- 
tance on  its  road  in  the  same  direction.  Two  or 
more  railroad  corporations  whose  roads  connect 
shall  not  charge  or  receive  for  the  transportation 
of  freight  to  any  station  on  the  road  of  either  of 
them  a  greater  sum  than  is  at  the  time  charged 
or  received  for  the  transportation  of  the  like  class 
and  quantity  of  freight  from  the  same  original 
point  of  departure  to  a  station  at  a  greater  dis- 
tance on  the  road  of  either  of  them  in  the  same 
direction.  In  the  construction  of  this  section  the 
sum  charged  or  received  for  the  transportation  of 
freight  shall  include  all  terminal  charges,  and  the 
road  of  a  corporation  shall  include  all  the  road  in 
use  by  it,  whether  owned  or  operated  under  a  con- 
tract or  lease." 

This  brings  before  us  a  typical  provision  gov- 


RAILWAY    LEGISLATION 

erning  long  and  short  hauls.  Among  others,  the 
law  of  Florida  contains  the  following  clause  bear- 
ing upon  the  same  point :  — 

The  railroad  commission  "  shall  have  full  power 
by  rules  and  regulations  to  fix  the  rates  of  freight 
and  passenger  transportation  to  be  allowed  for 
longer  and  shorter  distances  on  the  same  or  differ- 
ent railroads,  and  to  fix  what  shall  be  the  limits 
of  longer  and  shorter  distances.0 

Alabama  expresses  the  same  conditions  in  al- 
most identical  language.  Kentucky,  Louisiana, 
Minnesota,  Nebraska,  North  Carolina,  Tennessee, 
and  Texas  likewise  authorized  their  commissions 
to  suspend  the  long  and  short  haul  provision.  In 
Mississippi  the  law  specifies  that  "the  commis- 
sion shall  regulate  and  fix  the  rates  to  be  charged 
on  short  hauls  in  excess  of  what  may  be  charged 
on  long  hauls." 

Other  states  having  long  and  short  haul  provi- 
sions are  Arkansas,  California,  Connecticut,  Iowa, 
Nevada,  North  Dakota,  South  Carolina,  Vermont, 
Virginia,  and  Washington. 

Discriminations.  —  Discriminations  have  from 
the  first  presented  the  most  serious  aspects  of 
railway  regulation,  and  we  are  therefore  not  sur- 
prised to  find  statutory  provisions  prohibiting  dis- 
criminations in  sixteen  state  constitutions  and  in 
the  laws  of  three-fourths  of  all  the  states.  A 
common  form  of  expressing  this  prohibition  is  the 
following  :  — 

"If  any  railroad  corporation  shall  wilfully 
148 


GENERAL    RAILWAY    LEGISLATION 

charge,  collect,  or  receive  from  any  person  or 
persons,  for  the  transportation  of  any  freight  upon 
its  railroad,  a  higher  or  greater  rate,  toll,  or  com- 
pensation than  it  shall  at  the  same  time  charge, 
collect,  or  receive  from  any  other  person  or  per- 
sons for  the  transportation  of  a  like  quantity  of 
freight  of  the  same  class,  being  transported  from 
the  same  point,  in  the  same  direction,  over  equal 
distance  of  the  same  road,  or  if  it  shall  charge, 
collect,  or  receive  from  any  person  or  persons,  for 
the  use  and  transportation  of  any  railroad  car  or 
cars  upon  its  railroad,  a  higher  or  greater  sum 
than  it  shall  at  the  same  time  charge,  collect,  or 
receive  from  any  other  person  or  persons  for  the 
use  or  transportation  of  a  car  or  cars  of  the  same 
class,  for  a  like  purpose  from  the  same  point  in 
the  same  direction,  and  an  equal  distance,  all 
such  discriminating  rates,  charges,  or  collections, 
whether  made  directly  or  by  means  of  any  rebate, 
or  other  shift  or  evasion,  shall  be  considered  and 
taken  as  prima  facie  evidence  of  discrimination, 
which  is  hereby  prohibited  and  declared  unlawful, 
and  shall  be  punished.  .  .  ." 

The  great  importance  of  the  legal  attempts  to 
wipe  out  evil  practices,  known  under  the  names  of 
discrimination,  rebates,  extortion,  abuses,  etc., 
warrants  a  brief  indication  of  the  essence  of  the 
statutory  provisions  found  in  a  number  of  other 
states. 

Alabama. — What  constitutes  extortion  decided 
by  jury.  Penalty,  double  the  damage  inflicted 

149 


RAILWAY    LEGISLATION 

upon  a  shipper  plus  attorney  fees.  Commission 
hears  complaint.1 

California.  —  Railway  commission  given  power 
to  correct  abuses.  Railways  obliged  to  transport 
for  each  other  without  delay,  to  grant  right  of 
intersection,  etc.2 

Florida.  — A  law  of  1899  prohibits  railway  com- 
panies from  charging  more  than  reasonable  rates 
and  from  practising  unjust  discriminations. 

Illinois.  —  Extortion  and  discriminations  pun- 
ished by  heavy  fines,  amply  provided  for  in  the 
law. 

Michigan. — Discriminations  of  all  kinds  for- 
bidden, and  rates  at  non-competing  points  not  to 
be  greater  than  those  at  competitive  points. 

Nebraska.  —  Board  of  transportation  shall  inves- 
tigate and  prevent  discriminations. 

Ohio.  —  Railways  shall  not  discriminate  between 
each  other,  between  way  and  through  freights, 
between  trunk  and  other  railways.  Roads  shall 
furnish  equal  facilities  and  forward  freight  by 
lines  specified  by  the  shipper.  The  latter  may 
enforce  by  injunction. 

South  Dakota.  —  Unjust  discriminations  and  pref- 
erences declared  unlawful  in  two  separate  sections 
of  the  law.  Discriminations  as  to  goods,  cars,  rail- 
ways, persons,  etc.,  expressly  prohibited. 

Texas. — Discriminations  prohibited  under  former 
laws;  but  a  law  of  1899  punishes  discriminations 

1  Consult  constitution,  Article  XIV,  section  21. 

2  Consult  constitution,  Article  XI,  section  17. 


GENERAL    RAILWAY    LEGISLATION 

on  part  of  railways  against  steamship  lines  in  the 
interchange  of  traffic.  The  unusual  punishment 
of  not  less  than  two  and  not  more  than  five  years 
in  the  penitentiary  is  inflicted  by  the  law,  but  this 
shall  not  prevent  railways  from  granting  reduced 
rates  to  charitable  and  state  institutions,  to  excur- 
sionists, fairs,  railway  officers,  etc. 

Additional  states  which  have  legislated  on  dis- 
criminations are  Arkansas,  Colorado,  Connecticut, 
Georgia,  Iowa,  Kansas,  Kentucky,  Louisiana,  Mas- 
sachusetts, Mississippi,  Missouri,  Montana,  Nevada, 
New  Mexico,  New  York,  North  Carolina,  North 
Dakota,  Pennsylvania,  South  Carolina,  Utah,  Ver- 
mont, and  Wisconsin.  In  a  few  of  these  states  the 
legal  provisions  simply  assert  the  power  of  the 
commission  to  correct  abuses,  and  in  the  hands  of 
an  energetic  commission  or  other  state  officer  this 
is  probably  sufficient  successfully  to  combat  the 
evils  of  discriminations. 

Rates:  Publicity  and  Revision.  —  This  subject 
is  closely  connected  with  the  powers  and  duties  of 
railway  commissions.  Since,  however,  not  all  the 
states  have  commissions,  and  laws  relating  to  the 
fixing,  revising,  and  publishing  of  rates  exist  in 
some  of  these  states,  it  is  necessary  to  give  sepa- 
rate treatment  to  this  question.  The  intrinsic 
importance  of  the  subject  of  rates  warrants  its 
being  set  off  by  itself  for  special  treatment.  Rail- 
way rates  have  long  constituted  the  pivotal  point 
upon  which  have  turned  the  most  complex  as  well 
as  important  railway  problems,  and  it  is  no  exag- 


RAILWAY    LEGISLATION 

geration  to  say  that  all  the  other  phases  of  the 
railway  problem  sink  into  relative  insignificance 
in  the  presence  of  this  predominant  question. 

Only  four  states  (Connecticut,  Delaware,  Ore- 
gon, and  Rhode  Island)  have  no  laws  regulating 
rates  or  providing  for  their  revision  and  publicity. 
One  of  these  states,  Connecticut,  passed  laws  of 
this  kind  at  various  times  from  1853  to  1897. 
Since  the  latter  date  no  laws  have  been  on  its 
statute  books  governing  railway  rates.  In  eight 
states  the  laws  on  this  subject  are  less  complete 
than  in  the  great  majority  of  the  other  states, 
providing  in  some  instances  for  the  posting  of 
rates,  fixing  maximum  rates,  reserving  to  the  legis- 
lature the  power  to  alter  them  or  to  fix  them  on 
complaint,  either  directly  or  through  an  admin- 
istrative officer.1  The  maximum  rates  which  are 
established  in  some  instances  are  so  high  that  they 
can  scarcely  be  said  to  afford  any  regulation  of 
rates ;  for  instance,  Nevada  prescribes  10  cents  as 
the  maximum  for  passenger  rates  per  mile,  and 
20  cents  per  ton-mile  for  freight,  although  no  rail- 
way company  need  accept  less  than  an  aggregate 
charge  of  35  cents  for  any  service  of  transporta- 
tion. Another  illustration  is  found  in  Arkansas, 
where  a  law  establishes  8  cents  per  mile  on  lines 
of  15  miles  in  length  or  less  ;  lines  15  to  75  miles 
in  length,  5  cents ;  over  75  miles,  3  cents.  A 
company  may  charge  25  cents  "for  the  carriage  of 

1  These  States  are  Florida,  Idaho,  Indiana,  Kentucky,  Montana, 
New  Hampshire,  New  Mexico,  Vermont,  and  Wyoming. 

152 


GENERAL    RAILWAY    LEGISLATION 

any  passenger  who  may  get  on  or  off  a  train  at 
other  than  the  regular  station." 

Coming  now  to  those  states  which  provide  more 
specifically  for  the  establishment  and  publicity  of 
rates,  it  will  be  most  convenient  to  associate  such 
provisions  with  the  considerable  number  of  leading 
states  having  enacted  them.  In  Alabama  the  rail- 
road commissioners  may  revise  or  increase  rates, 
always  having  due  regard  to  the  value  of  the  ser- 
vice and  other  conditions  of  traffic.  Having  been 
approved  by  the  commission,  such  rates,  special 
as  well  as  general,  may  be  published.  In  Arkansas 
a  legal  form  very  common  in  earlier  charters  and 
laws  is  still  in  existence,  limiting  the  power  of  the 
legislature  to  regulate  rates  and  fares  so  as  never 
to  bring  the  net  income  on  the  capital  stock  of  a 
railway  below  fifteen  per  cent  per  annum.  The 
rates  on  lines  fifty  miles  and  less  in  length  are 
fixed  by  law,  but  may  be  reduced  by  the  commis- 
sion, not,  however,  so  as  to  bring  the  net  income 
below  ten  per  cent.  The  classes  of  freight  and 
corresponding  rates  shall  be  posted  five  days  before 
taking  effect.  Up  to  1899  an  Arkansas  law  was 
in  effect  exempting  railways  subject  to  competi. 
tion  from  that  provision  of  the  law  providing  for 
some  days'  notice ;  such  roads  were  permitted  to 
put  posted  rates  into  effect  immediately.  Under 
its  constitution  the  state  of  California  is  empowered 
to  regulate  rates.  The  commission  fixes  reason- 
able rates,  and  the  railway  companies  (under  the 
constitution)  are  liable  to  a  fine  of  $20,000  for  over- 


RAILWAY    LEGISLATION 

charges.  The  schedules  adopted  by  the  commission 
must  be  published  by  the  companies,  although  the 
commission  itself  may  publish  them.  The  maxi- 
mum rates  prescribed  in  California  are  based  on  the 
graded  mileage  system.  In  Georgia  railway  com- 
panies may  control  rates  on  their  respective  lines, 
subject  to  the  commission  and  laws  of  the  state. 
Rate  schedules  shall  be  published  by  the  commis- 
sion in  certain  newspapers,  and  railway  companies 
must  post  the  same.  Weighing  of  freight  is  done 
by  sworn  weighers.  Publicity  is  compulsory  under 
the  laws  of  Illinois,  and  the  general  assembly 
directs  the  commission  by  law  to  make  schedules. 
On  the  application  of  the  mayor  and  council  or 
trustees  of  a  township,  the  commission  shall  exam- 
ine rates  under  the  laws  of  Iowa,  and  all  rates 
established  by  the  commission  shall  be  considered 
just  and  reasonable  until  proven  otherwise.  Rail- 
way companies  shall  promptly  post  and  file  with 
the  commission  schedules  of  rates.  Ten  days* 
notice  is  required  for  an  advance  in  rates,  although 
no  previous  notice  must  be  given  for  reductions. 
The  Kansas  commission  law  having  been  declared 
unconstitutional,  the  legal  status  of  the  question 
of  rates  is  perhaps  uncertain  in  that  state.  For- 
merly maximum  rates  were  prescribed,  and  no  rates 
could  be  increased  without  sixty  days*  notice.  In 
Louisiana  maximum  rates  are  prescribed  by  the 
laws  of  1890  and  1894.  The  commission  adopts 
changes  and  regulates  rates  and  governs  the  rela- 
tions between  main  and  branch  lines.  In  Maine 


GENERAL    RAILWAY    LEGISLATION 

the  legislature  may  fix  rates  which  shall  be  subject 
to  the  revision  of  that  body  and  posted.  When- 
ever practicable,  rules  and  regulations  shall  be 
printed  on  the  ticket.  In  Michigan  railway  com- 
panies have  power  to  regulate  the  time,  manner, 
and  compensation  for  their  services,  within  the 
limits  of  maximum  rates  established  by  statute. 
The  looo-mile  ticket  law  of  1891,  requiring  com- 
panies to  sell  such  tickets  at  the  rate  of  two  cents 
per  mile,  and  to  redeem  unused  portions  of  the 
same,  was  declared  unconstitutional  in  1899.  A 
recent  statute  regulates  the  relation  of  railways  to 
bridge  and  tunnel  companies  and  fixes  the  maxi- 
mum rates  for  those  companies.  The  commission 
may  report  upon  the  desirability  of  classifications 
of  freight,  as  well  as  compare  and  fix  proportional 
rates  on  milk.  The  Minnesota  companies  file 
schedules  with  the  commission.  Published  sched- 
ules cannot  be  changed  except  on  ten  days*  notice. 
A  law  of  1899  prevents  railway  companies  from 
raising  rates  on  grain,  flax,  lumber,  coal,  and  live 
stock,  except  on  sixty  days*  notice,  unless  per- 
mitted to  do  so  by  an  order  of  the  commission  in 
writing.  Railway  companies  are  required  to  give 
ten  days'  notice  when  the  revision  of  rates  is  under 
consideration  in  Mississippi.  The  commission  may 
revise  both  individual  and  joint  rates  and  approve 
classifications  and  rate  schedules  before  the  same 
are  posted.  The  Missouri  commission  may  make 
classifications  and  freight  rates,  and  from  time  to 
time  revise  schedules  of  maximum  rates.  In  Ne- 


RAILWAY    LEGISLATION 

braska  the  legislature  prescribes  maximum  rates, 
from  which  companies  may  take  an  appeal  to  the 
supreme  court.  On  order  of  the  court  the  board 
of  transportation  may  reduce  and  revise  maximum- 
rate  schedules.  No  advance  can  be  made  without 
ten  days'  notice,  although  reductions  are  permitted 
without  notice.  Railways  file  schedules  with  the 
commission.  A  New  Jersey  law  permits  railway 
companies  to  charge  what  they  may  think  reason- 
able, below  a  certain  maximum  established  by  law. 
Railways  shall  not  charge  more  from  way  stations 
than  between  centres.  The  legislature  of  New 
York  may  fix  maximum  rates,  reduce  the  same, 
and  require  companies  to  furnish  necessary  infor- 
mation to  the  commission.  Penalties  are  imposed 
for  charging  excessive  rates.  The  looo-mileage- 
book  law  of  1895  was  declared  unconstitutional  in 
1900.  The  rates  established  by  the  corporation 
commission  of  North  Carolina  shall  be  considered 
prima  facie  reasonable,  from  which  carriers  may 
appeal  to  the  courts.  Rate  schedules  must  be 
posted.  In  North  Dakota  railway  companies  are 
required  to  publish  schedules  of  classification,  and 
rates  must  be  examined  and  revised  by  the  com- 
mission. No  advance  can  be  made  except  on  ten 
days'  notice  ;  reductions,  without  notice.  Railway 
companies  may  appeal  to  the  district  courts  from 
any  order  of  the  commission.  Maximum  rates  on 
coal  are  especially  prescribed.  Under  the  laws  of 
Ohio  every  company  shall  post  its  rates,  and  accept 
no  less  than  the  published  rates  except  on  ten  days' 


GENERAL    RAILWAY    LEGISLATION 

notice.  Maximum  rates  are  prescribed  for  both 
main  and  branch  lines,  charges  being  "  evened  up  " 
by  nickels.  The  Pennsylvania  bureau  of  railways 
shall  see  to  it  that  no  more  is  charged  than  what 
is  permitted  by  special  charters  or  general  laws 
under  which  the  railway  companies  do  business. 
Maximum  rates  have  been  commonly  prescribed  in 
charters  and  statutes  of  the  state.  A  recent  law 
of  South  Carolina  compels  railway  companies  to 
post  schedules  of  rates.  The  latter  shall  be  rea- 
sonable and  just,  and  may  be  made  by  the  commis- 
sion. On  complaint,  the  commission  may  also 
revise  and  fix  rates  on  milk.  The  railway  corpo- 
rations of  Tennessee  are  required  to  file  schedules 
with  the  commission  and  to  secure  a  certificate  of 
privilege,  with  which  the  same  shall  be  published. 
If  railway  companies  fail  to  file  such  schedules,  the 
commission  may  fix  rates.  In  establishing  rates 
the  commission  is  required  by  law  to  take  into  con- 
sideration water  competition.  The  Texas  commis- 
sion may  make  classifications,  establish  rates,  and 
provide  railway  companies  with  schedules.  These 
cannot  go  into  effect  except  on  twenty  days'  notice. 
Carriers  may  bring  direct  action  to  test  the  reason- 
ableness of  such  rates.  In  Vermont  railway  com- 
panies may  fix  rates,  subject  to  revision  by  the 
courts  on  petition  of  three  or  more  freeholders. 
Railways  more  than  fifty  miles  in  length,  wholly 
or  partly  in  the  state,  shall  sell  looo-mile  books 
at  not  over  two  cents  per  mile,  on  penalty  of  from 
$500  to  $1000.  The  laws  of  Virginia  prescribe 


RAILWAY    LEGISLATION 

maximum  rates  which,  under  present  conditions, 
are  clearly  very  much  above  what  any  railway  com- 
pany would  think  of  charging,  and  prevents  any 
statutory  reduction  as  long  as  the  net  returns  do 
not  exceed  fifteen  per  cent.  Copies  of  rate  sched- 
ules must  be  filed  with  the  commission,  and  no 
changes  are  permitted  except  on  ten  days'  notice 
for  an  advance  and  three  days'  notice  for  a  reduc- 
tion. It  will  be  noticed  that  reductions  cannot  be 
made  without  giving  previous  notice.  This  is  im- 
portant. All  other  states  not  mentioned  thus  far 
have  analogous  laws  on  the  subject  of  rates.  Some 
of  them  do  not  provide  as  liberally  as  many  of 
those  which  have  been  quoted,  but  all  of  them,  in 
one  way  or  another,  cover  the  subject. 

Access  to  Books. — In  about  one-half  of  the  states 
legal  provisions  governing  access  to  books  of  rail- 
way companies  are  not  very  stringent,  and  fre- 
quently do  not  go  beyond  the  general  statement 
that  such  books  shall  be  open  to  officers,  directors, 
and  stockholders,  or  a  certain  number  of  them. 
Railway  commissions  or  other  state  officers  have 
no  direct  control  over  the  records  of  companies.1 

To  illustrate  the  nature  of  legal  provisions  in 
the  other  group  of  states  brief  statements  of  laws 
governing  access  to  books  in  them  may  here  be 

1  States  falling  into  this  group  are  Arizona  Territory,  Colorado, 
Delaware,  Idaho,  Indiana,  Kentucky,  Maryland,  Minnesota,  Missis- 
sippi, Montana,  Nebraska,  Nevada,  New  Jersey,  New  Mexico,  Ohio, 
Oregon,  Pennsylvania,  Tennessee,  Utah,  Virginia,  Washington,  West 
Virginia,  Wisconsin,  and  Wyoming. 

158 


GENERAL    RAILWAY    LEGISLATION 

introduced.  In  Alabama  the  commission  shall 
examine  books  and  records  of  a  railway  company 
on  application  of  one  director  or  representatives  of 
one-fiftieth  of  the  capital  stock  or  of  one-fiftieth  of 
the  total  indebtedness.  The  results  of  this  exami- 
nation may  or  may  not  be  published,  discretionary 
power  lying  with  the  commission.  A  committee 
of  the  general  assembly  may  investigate  the  books 
of  Connecticut  companies.  In  Massachusetts 
the  commission  shall  examine  books  and  papers 
on  request  of  one  director  or  the  holders  of 
one-fiftieth  of  the  stock  and  bonds  of  the  com- 
pany. The  commission  of  South  Carolina  may 
at  any  time  examine  the  books,  or  on  written 
application  of  one  director  or  of  the  holders  of  one- 
fiftieth  of  the  stock,  bonds,  etc.,  the  commission 
shall  make  such  examinations.  In  Texas  the 
commission,  a  committee  of  the  legislature,  and 
three  stockholders,  and  "any  officer  or  agent  of 
the  state  may  examine  books  of  railway  companies." 
In  states  other  than  those  mentioned  commissions 
have  access  to  books  and  records  by  law.  These 
are  Arkansas,  California,  Colorado,  Florida, 
Georgia,  Illinois,  Iowa,  Kansas,  Maine,  Massachu- 
setts, Michigan,  Missouri,  New  Jersey,  North 
Dakota,  North  Carolina,  Rhode  Island,  South 
Carolina,  South  Dakota,  Texas,  and  Vermont. 

Annual  and  Other  Reports.  —  Reference  to  the 
sections  on  charters,  as  well  as  early  general  laws, 
will  recall  the  fact  that  annual  reports  were  fre- 
quently called  for  under  the  private  as  well  as 


RAILWAY    LEGISLATION 

public  laws,  and  that  such  reports  vary  in  their 
comprehensiveness  not  only  among  different  states, 
but  also  among  charters  granted  by  the  legislature 
of  the  same  state.  In  some  charters  and  laws 
such  reports  include  only  a  half  dozen  or  dozen 
items  relating  to  mileage,  capital  stock,  and  bonds. 
In  others,  a  hundred  or  more  items  were  carefully 
prescribed  and  penalties  imposed  for  noncompli- 
ance  with  the  provisions  of  the  charter  or  of  the 
laws.  The  reports  which  are  called  for  under 
existing  statutes  differ  quite  as  widely  as  those 
made  pursuant  to  early  legislation.  Typical  pro- 
visions existing  at  the  present  time  in  the  laws  of 
those  states  which  provide  in  a  legal  way  for  these 
needs  can  be  illustrated  by  reference  to  the  laws 
of  the  states  here  given.  In  Maine  the  commis- 
sion prescribes  the  form  for  the  annual  report  of 
railway  companies  which  shall  "be  designed  to 
produce  uniformity  "  in  the  annual  returns  of  all 
the  railroads  in  New  England.  Similarly,  in 
Massachusetts,  an  act  of  1899  aims  to  bring  the 
returns  of  railway  companies  into  harmony  with 
those  of  the  Interstate  Commerce  Commission. 
Reports  must  be  uniform,  as  prescribed  by  the 
commission,  and  quarterly  financial  statements 
shall  be  made.  In  New  York  railway  companies 
make  annual  reports  in  forms  prescribed  by  the 
commission,  and  the  commission  in  turn  makes  its 
annual  report.  In  Pennsylvania  officers  of  railway 
companies  are  required  to  report  annually  to  stock- 
holders and  at  such  other  times  as  the  legislature 

160 


GENERAL    RAILWAY    LEGISLATION 

may  require.  The  law  of  1897  orders  the  secretary 
of  internal  affairs  to  supply  blanks  for  reports  of 
railway  companies,  copies  of  which  shall  be  sent  to 
the  government  and  members  of  the  legislature. 
The  bureau  of  railroads  also  keeps  these  reports 
on  file.  In  Illinois  railway  directors  are  required 
to  report  annually  to  the  auditor  in  the  manner 
prescribed  by  law ;  also  to  the  commission  in  a 
form  embracing  forty-one  items.  The  commission 
is  required  to  file  and  tabulate  the  reports  of  rail- 
ways. The  law  of  Iowa  is  similar  to  that  of 
Illinois  except  that  the  annual  report,  as  prescribed 
by  the  commission,  contains  only  eleven  items, 
and,  instead  of  reporting  to  the  auditor,  "a  detailed 
exhibit "  of  receipts,  etc.,  shall  be  presented  to  the 
government.1 

Twenty  states  have  statutory  provisions  less 
definite  and  comprehensive  in  their  scope,  calling 
for  reports  to  stockholders  by  boards  of  directors, 
or  reports  of  railway  officers  to  some  state  officer 
or  officers,  or  to  the  legislature,  or  to  two  or  more 
of  all  these.2 

1  Other  states  calling  for  annual  reports,  more  or  less  comprehen- 
sive, either  to  the  commission  or  to  some  executive  or  administrative 
state  officer,  in  forms  prescribed  by  the  commission,  are  Colorado, 
Connecticut,   Florida,   Illinois,   Iowa,   Kansas,   Kentucky,   Maine, 
Michigan,   Minnesota,   Mississippi,    Massachusetts,   Missouri,   Ne- 
braska, New  Hampshire,  Ohio,  New  York,  Rhode  Island,  South 
Dakota,  South  Carolina,  Texas,  Vermont,  Virginia,  and  Pennsylvania. 

2  These    states    are    Alabama,   Arkansas,   Arizona,   California, 
Georgia,  Idaho,  Indiana,  Louisiana,  Montana,  Nevada,  New  Jer- 
sey, New   Hampshire,   North   Carolina,   North   Dakota,   Oregon, 
Tennessee,  Utah,  Washington,  West  Virginia,  and  Wisconsin. 


RAILWAY    LEGISLATION 

Issues  of  Stocks  and  Bonds.  —  Many  controversies 
have  been  waged  over  the  question  of  the  capital 
stock  of  our  railways.  A  conservative  student  of 
the  question  has  placed  the  capitalized  value  of  the 
railways  of  the  country  at  $60,000  per  mile,  and 
this  he  does  not  consider  excessive  nor  appreciably 
above  the  real  value  of  the  plants  as  they  exist  at 
the  present  time.  So  far  as  state  laws  are  con- 
cerned, it  would  be  difficult  to  determine  the  truth 
of  this  matter  on  the  basis  of  information  railway 
companies  have  been  obliged  to  furnish  under  the 
statutes.  In  Massachusetts  an  increase  in  capital 
stock  or  signs  of  indebtedness  may  be  made  only 
on  authority  of  the  commission  before  which  such 
questions  are  determined  on  hearing.  Ohio  rail- 
ways shall  report  to  the  commission  the  cost  of  the 
road,  the  amount  of  capital  stock,  indebtedness, 
etc.  The  aggregate  indebtedness  shall  not  exceed 
the  capital  stock.  In  Pennsylvania  railway  stock 
is  limited  to  $150,000  per  mile,  bonds  to  the  same 
amount,  and  the  total  of  the  stock,  bonds,  and 
other  paper  to  $300,000  per  mile.  In  Arkansas 
consolidated  companies  shall  not  cause  the  aggre- 
gate of  their  stocks  and  bonds  to  exceed  the  sum 
represented  by  constituent  companies.  By  a 
majority  vote  of  the  stockholders  the  company 
may  borrow,  at  seven  per  cent,  an  amount  not 
greater  than  the  total  capital  stock.  In  Colorado 
all  stock  shall  represent  labor,  services,  money,  and 
property ;  the  same  shall  be  increased  only  under 
general  law  and  by  a  majority  vote  of  the  stock- 

162 


GENERAL    RAILWAY    LEGISLATION 

holders.  Kentucky  companies  can  increase  capital 
stock  only  on  recommendation  of  the  commission. 
The  amount  of  indebtedness  shall  never  exceed  the 
total  cash  paid  in.  In  Indiana  boards  of  directors 
may  not  increase  capital  stock ;  capital  stock  may 
not  be  increased  to  exceed  $15,000  per  mile,  and  a 
certificate  stating  the  amount  of  such  increase 
shall  be  filed  with  the  secretary  of  state.  The 
New  York  commission  may  regulate  stock  issues 
and  pass  upon  an  increase  or  a  reduction  in  the 
same.  Other  states  having  similar  provisions  are 
Indiana,  Illinois,  Louisiana,  Maine,  Maryland, 
Mississippi,  Missouri,  New  Hampshire,  New 
Jersey,  South  Dakota,  Texas,  Wisconsin,  and 
Wyoming. 

This  leaves  a  group  of  more  than  one-half  of  the 
states  which  do  not  attempt  directly  to  regulate 
the  issuance  of  stock  by  law.  In  some  of  them  it 
is  provided  that  a  certificate  of  increase  shall  be 
filed  with  the  secretary  of  state  or  some  other 
state  officer,  and  that  a  two-thirds  vote  of  the 
stockholders  is  necessary  before  directors  may 
authorize  an  increase  in  capital  stock  or  the  issu- 
ance of  bonds.1 

State  Railway  Commissions.  — The  railway  com- 
mission laws  sometimes  embody  all  the  railway 

1  These  states  are  Alabama,  Arizona,  California,  Delaware, 
Florida,  Georgia,  Iowa,  Kansas,  Kentucky,  Michigan,  Minnesota, 
Montana,  Nebraska,  Nevada,  New  Mexico,  North  Carolina,  North 
Dakota,  Oregon,  Rhode  Island,  South  Carolina,  Texas,  Utah,  Ver- 
mont, Virginia,  Washington,  and  West  Virginia. 

163 


RAILWAY    LEGISLATION 

legislation  in  existence  in  the  state.  This  was  true 
in  Oregon  ;  and  when,  in  1898,  the  commission  law 
of  that  state  was  repealed,  Oregon  was  left  practi- 
cally without  any  legislation  on  the  subject  of  rail- 
ways. In  addition  to  Oregon,  Delaware,  Rhode 
Island,  and  Arizona  Territory  are  the  only  states 
which  have  failed  to  legislate  on  railways  to  any 
considerable  extent.  In  states  where  the  commis- 
sion laws  embrace  only  regulative  features,  ques- 
tions of  organization  and  management  are  treated 
in  the  general  corporation  laws  or  in  subtitles 
under  these.  The  general  statement,  however, 
holds  true  that  the  regulative  features  of  railway 
legislation  of  the  different  states  of  the  Union  are 
embodied  in  our  commission  laws  in  all  states  in 
which  commissions  exist.  The  railway  commis- 
sions represent  the  only  active  administrative  agent 
which  our  laws  have  provided,  and  the  adequacy  or 
inadequacy  of  state  administration  depends  upon 
the  authority  vested  in  this  agent. 

In  their  composition  our  commissions  represent 
the  same  degrees  of  variety  that  exist  in  legislative 
provisions  on  most  other  railway  topics.  In  the 
number  of  members  they  vary  from  one  to  five  ;  in 
the  number  of  years  during  which  they  hold  office, 
from  two  to  six.  In  the  manner  of  their  appoint- 
ment we  find  popular  suffrage,  appointive  power  of 
a  governor,  and  the  advisory  power  of  a  branch  of 
the  legislature.  Their  salaries  vary  from  $1000 
to  perhaps  more  than  five  times  that  amount,  being 
entirely  independent  of  the  duties  performed  by 

164 


GENERAL    RAILWAY    LEGISLATION 

them,  and  bearing  no  relation  whatever  to  the 
responsibilities  vested  in  them.  The  funds  from 
which  the  salaries  are  paid  are  sometimes  provided 
by  general  taxation,  sometimes  by  an  assessment 
on  railways  in  proportion  to  mileage,  and  again  by 
levying  a  certain  per  cent  on  the  net  income  of  the 
railways  in  the  state.  The  absolute  lack  of  system 
will  be  apparent  to  any  one  who  makes  even  a  cur- 
sory examination  of  these  provisions. 

In  qualifications  we  find  less  although  some  va- 
riety. It  is  generally  provided  that  the  commis- 
sioner or  commissioners  shall  be  qualified  voters  of 
their  respective  states  ;  that  they  shall  be  citizens 
of  the  state,  and,  in  some  instances,  of  the  United 
States  ;  that  they  shall  have  attained  a  certain  age, 
usually  that  of  qualified  voters,  and  finally  that 
they  shall  have  no  financial  interests  in  any  of  the 
railroads  over  which  they  are  expected  to  exercise 
control. 

The  jurisdiction  of  railway  commissions  varies 
from  controlling  railway  companies  alone,  on  the 
one  hand,  to  exercising  administrative  control  over 
a  large  combination  of  corporate  interests  repre- 
senting practically  the  entire  industrial  life  of  the 
commonwealth  on  the  other.  The  latter  is  strik- 
ingly illustrated  by  the  industries  over  which  the 
corporation  commission  of  North  Carolina  is  le- 
gally bound  to  exercise  supervision.  These  embrace 
street  railways,  steam  railways,  steamboat  and  canal 
companies,  express  companies,  sleeping-car  com- 
panies, telephone  and  telegraph  companies,  banks, 

165 


RAILWAY    LEGISLATION 

building,  loan,  and  trust  associations.  The  Penn- 
sylvania bureau  is  required  by  law  to  exercise 
administrative  control  over  railways,  banks,  mining, 
and  manufacturing  establishments.  The  Illinois, 
Nebraska,  and  Minnesota  commissions  exercise 
control  over  railways  and  warehouses.  The  New 
York  commission,  in  addition  to  railways,  has 
charge  of  sleeping  and  drawing-room  car  com- 
panies. Others  are  charged  with  railway  and  street 
railway  companies.  Others  also  with  bridges  and 
ferries.  Not  a  few  of  the  commissions  are  by  law 
obliged  to  devote  more  or  less  of  their  time  and 
energy  to  institutions  which  lie  entirely  outside 
of  the  means  of  transportation  and  communica- 
tion. From  the  point  of  view  of  efficient  adminis- 
tration the  tendency,  if  such  exists,  to  empower  a 
single  administrative  organ  to  exercise  control  over 
a  great  variety  of  industrial  establishments  cannot 
receive  the  approval  of  thoughtful  men.  All  of  our 
great  industrial  establishments  represent  interests 
which  are  peculiarly  their  own,  and  other  features 
which  are  characteristic  only  of  similar  establish- 
ments. This  calls  for  special  agencies,  whose  duty 
it  should  be  to  concentrate  all  their  efforts  in  that 
particular  field.  The  inclusion  of  so  many  indus- 
tries inevitably  leads  to  a  division  of  interests,  and 
the  equally  inevitable  diminution  in  concentration 
and  efficiency.  Special  types  of  industry  require 
special  administrative  agents,  and  that  tendency 
in  our  laws  which  burdens  a  single  administrative 
organ  with  a  great  variety  of  complex  duties  can- 

166 


GENERAL    RAILWAY    LEGISLATION 

not  be  looked  upon  as  desirable.  It  is  beside  the 
mark  to  attempt  to  maintain  that  a  large  adminis- 
trative body  can,  in  its  membership,  be  differen- 
tiated in  such  a  way  as  to  represent  in  a  consolidated 
way  the  specialized  interests  of  all  the  different 
leading  industries  of  a  state. 

Railway  commissions  are  frequently  divided  into 
two  general  classes  —  advisory  and  regulative  — 
the  former  being  illustrated  by  the  commissions 
of  states  like  Massachusetts,  Wisconsin,  Vermont, 
Alabama,  and  the  latter  by  Illinois,  Iowa,  Nebraska, 
and  Texas.  So  far  as  a  formal  statutory  enumera- 
tion of  specified  powers  goes,  this  classification  is 
doubtless  correct.  But  we  should  not  lose  sight 
of  the  fact  that  an  advisory  commission,  with  its 
powers  exercised  by  thoroughly  competent  men 
familiar  with  the  railway  business,  and  capable  of 
handling  the  duties  of  their  office  with  facility, 
may  in  the  long  run  accomplish  infinitely  more 
than  a  regulative  commission  of  the  strongest 
type,  represented  by  men  whose  tenure  of  office 
is  uncertain,  whose  familiarity  with  railways  is  the 
most  imperfect  and  superficial,  and  whose  purpose 
in  the  attempt  to  exercise  their  duties  must  at  best 
be  vague  and  beclouded.  The  efficiency  of  all  con- 
trol and  regulation  through  commissions  must  ulti- 
mately rest  upon  the  man.  It  is  the  power  that 
lies  behind  the  throne  which  vitalizes  the  machine. 
A  railway  commissioner  in  a  state  embracing  some 
of  the  most  important  railway  systems  of  the  coun- 
try not  long  ago  made  the  statement  that  in  the 

167 


RAILWAY    LEGISLATION 

office  now  occupied  by  him  little  was  done  except 
the  gathering  of  statistics  and  the  giving  of  useless 
advice.  He  pointed  out  in  detail  how  the  efficiency 
of  that  particular  office  had  varied  very  greatly  with 
the  incumbency  of  different  types  of  men.  With- 
out anticipating  what  may  be  said  in  subsequent 
paragraphs,  it  will  add  something  to  the  interest 
that  may  attach  to  an  examination  of  the  powers 
and  duties  of  different  commissions  to  state  at  the 
outset  that  the  vital  weaknesses  of  all  the  legisla- 
tion of  all  the  different  American  states  may  be 
grouped  under  two  heads :  First,  the  lack  of  ade- 
quate administrative  machinery ;  second,  the  lack 
of  organic  connection  between  this  administrative 
machinery  and  the  railways,  on  one  hand,  and  the 
public  on  the  other  ;  also,  this  same  lack  of  mutual 
understanding  and  vital  connection  between  the 
railways  and  the  public.  To  bring  about  the  latter 
there  is  not  a  single  efficient  provision  in  all  the 
railway  laws  of  the  United  States  ;  and  the  fact 
that  railways  have  voluntarily,  and  in  some  in- 
stances with  marked  success,  brought  about  such 
mutual  understanding  by  no  means  affords  a  suffi- 
cient excuse  for  the  absence  of  provisions  establish- 
ing such  organic  connections  by  law.  It  has  often 
been  said  that  in  America  the  weakest  line  is  capa- 
ble of  dictating  with  success  to  the  strongest,  and 
that  the  strongest,  finding  itself  at  the  mercy  of 
the  weakest,  is  under  the  circumstances  obliged  to 
pursue  a  course  which  is  as  ruinous  to  its  own  inter- 
ests as  it  is  antagonistic  to  the  interests  of  the  pub- 

168 


GENERAL    RAILWAY    LEGISLATION 

lie.  No  one  whose  privilege  it  is  to  know  the 
railway  men  of  the  country  will  for  a  moment 
maintain  that  these  are  not,  as  a  body,  sincerely 
desirous  of  serving  the  public  in  the  best  possible 
way.  Their  aspirations  and  ambitions,  although 
legitimately  and  necessarily  keeping  in  view  the 
immediate  interests  of  the  corporations  which  they 
represent,  go  beyond  the  horizon  of  narrow  selfish 
interests,  and  take  into  view  the  larger  field  of 
mutual  prosperity  and  common  gain.  But  granted 
that  ninety-nine  per  cent  of  the  railway  managers 
and  officials  are  voluntarily  inclined  to  do  that 
which  we  believe  the  public  interests  demand, 
what  is  there  to  prevent  the  one  recalcitrant  road 
from  holding  out  and  demoralizing  the  entire  ser- 
vice and  preventing  the  ninety-nine  from  living  up 
to  their  good  intentions  ? l  The  sincere  desires  of 
the  best  railway  officials  may  be  frustrated  by  the 
arbitrary  demands  and  reckless  dictation  of  a  single 
unscrupulous  manager.  In  this  point  lies  the  fatal 
weakness  of  American  railway  legislation.  One 
feels  again  and  again  the  absolute  helplessness  in 
which  the  shipper  finds  himself,  on  the  one  hand, 
and  the  good  railway  manager  on  the  other.  No 
administrative  machinery  has  been  provided  whereby 
this  one  outlaw  can  compulsorily  be  brought  into 
harmonious  action  with  the  ninety-nine  promptly, 
thoroughly,  and  finally.  Demoralization  in  railway 
affairs  has  again  and  again  been  the  result  of  the 
imposition  upon  the  ninety-nine  considerate  offi- 

1  This  is  what  Professor  Ely  calls  "  the  problem  of  the  twentieth  man. " 

169 


RAILWAY   LEGISLATION 

cials  of  the  inferior  and  defective  code  of  the  one 
unscrupulous  manager. 

In  view  of  the  great  importance  of  commission 
legislation,  it  has  been  deemed  desirable  to  give 
in  greater  detail  the  provisions  governing  them. 
Some  provisions  which  are  common  to  many  laws, 
such  as  those  relating  to  certain  qualifications  of 
commissioners  and  employment  of  secretaries, 
clerks,  deputies,  and  experts  by  these  commis- 
sions, will  not  be  repeated  in  all  the  states. 
Likewise  those  clauses  governing  railway  taxation 
and  railway  labor,  and  the  duties  of  commissions 
with  respect  to  these  topics,  will  be  omitted.  Nor 
will  repeated  references  be  made  to  reports  made 
by  commissions  to  governors,  auditors,  and  other 
officers  and  legislatures.  It  will  be  understood 
that  the  making  of  reports  is  one  of  the  regular 
duties  of  commissions. 

Summary  of  Commission  Laws.1  Alabama.  — 
Three  commissioners,  holding  office  for  four  years, 
appointed  by  the  governor  with  the  advice  and  con- 
sent of  the  senate.  Removable  by  the  supreme 
court  on  impeachment,  like  other  state  officers. 
The  commission  may  settle  disagreements  between 
connecting  roads,  with  appeal  to  chancery  court ; 
exercise  general  supervisory  power  and  make  rec- 
ommendations to  railway  companies  and  governor, 
to  whom  an  annual  report  must  be  submitted.  Rail- 
ways shall  furnish  necessary  information  to  com- 

1  See  also  F.  C.  Clark,  State  Railroad  Commissions  and  how  to 
make  them  effective. 

I70 


GENERAL    RAILWAY    LEGISLATION 

mission.  Commission  to  carry  on  correspondence 
with  similar  bodies  in  other  states. 

Arkansas. — Three  commissioners,  elected  by 
qualified  voters,  shall  hold  no  federal  offices ;  rail- 
ways shall  submit  rate  schedules  ;  commission  may 
make  rates  and  approve  schedules ;  no  change  in 
rates  except  on  ten  days'  notice  ;  they  shall  inves- 
tigate and  hear  complaints ;  railway  officers  shall 
furnish  information ;  facts  as  found  by  commission 
to  be  prima  facie  evidence ;  may  employ  experts ; 
examine  books  of  companies  ;  shall  determine  cost 
of  reconstruction,  and,  on  petition,  order  connec- 
tions and  fix  joint  rates;  report  annually  to 
governor. 

Arizona.  — No  commission. 

California. — Three  commissioners,  elected  by 
districts  for  four  years ;  legislature  may  remove 
by  two-thirds  vote.1  "  The  board  shall  have  power 
to  issue  writs  of  summons  and  of  subpoena  in  like 
manner  as  courts  of  record."  Commission  hears 
complaints,  and  defendant  companies  shall  appear 
within  fifteen  days;  decisions  and  grounds  upon 
which  same  are  based  to  be  given  in  writing ; 
shall  hold  public  session  in  San  Francisco  every 
month,  and  if  necessary,  at  other  places. 

Colorado.  —  No  commission. 

Connecticut.  — Three  commissioners  appointed 
by  governor,  with  consent  of  senate,  for  four 
years ;  one  to  be  a  lawyer,  another  a  civil  en- 
gineer, and  the  third  a  business  man :  commission 

1  Consult  Constitution,  Article  XII,  §  22. 
171 


RAILWAY    LEGISLATION 

inspects  railways  twice  each  year;  publishes  and 
posts  important  railway  legislation ;  may  order 
gates,  flagmen,  signals,  and  so  on ;  subpoena 
witnesses ;  investigate  accidents ;  recommend  to 
railway  companies  in  writing  things  conducive 
to  public  safety  and  interest.  Appeal  from  de- 
cision of  commission  may  be  taken  to  superior 
court. 

Delaware.  —  No  commission. 

Florida. — Three  commissioners  appointed  by 
governor  and  senate  for  four  years.  The  first 
commission  was  composed  by  law  of  one  lawyer, 
one  railway  man,  and  one  farmer;  succeeding 
commissioners  elected  without  reference  to  voca- 
tion. Commission  has  power  to  establish  classi- 
fications, rates,  and  regulations  which  shall  be 
just  and  reasonable;  hearings  must  be  given  to 
persons  and  corporations ;  decisions  of  commission 
published  at  its  discretion ;  commission  may  ex- 
amine books,  agents,  etc. ;  non-compliance  with 
laws  subject  railways  to  fines ;  commission  may 
institute  proceedings  through  attorney-general ; 
railway  officers  making  false  reports  fined  heavily. 
The  commission  has  judicial  power — "that  said 
railway  commissioners  are  hereby  vested  with 
judicial  powers  to  do  or  enforce  or  perform  any 
function,  duty,  or  power  conferred  upon  them  by 
this  act,  to  the  exercise  of  which  judicial  power 
is  necessary." *  Commission  has  also  power  to 
create  rating  or  basing  points :  "  Provided,  That 

1  Laws,  1899,  no.  39,  §  22. 
172 


GENERAL    RAILWAY    LEGISLATION 

the  said  commissioners  shall  have  the  power  to 
create  rating  or  basing  points  at  places  where 
competing  lines  meet,  or  where  water  or  other 
competition  exists,  and  to  break  the  continuity 
of  rates  to  and  from  such  points,  so  as  to  main- 
tain competition  between  rival  lines  and  points, 
and  may,  in  fixing  the  rate  upon  any  commodity, 
take  into  consideration  the  competition  between 
different  localities  or  shipping  points  producing  or 
shipping  such  commodities."1  Duty  of  commis- 
sion to  bring  proper  matters  before  Interstate 
Commerce  Commission. 

Georgia.  —  Three  commissioners  appointed  by 
governor  and  senate  for  six  years  —  one  a  lawyer 
and  one  a  railway  man.  Commission  may  make 
reasonable  and  just  rates  and  regulations  "for 
each  of  the  corporations  doing  business  in  the 
state."  They  shall  examine  rates  into  and  out  of 
the  state ;  may  examine  agents  and  officers  under 
oath  ;  compel  evidence  to  be  given ;  penalties  are 
imposed  for  disobedience  to  the  rules  of  the  com- 
mission ;  commission  appeal  to  Interstate  Com- 
merce Commission.2 

Idaho.  —  No  commission. 

Illinois.  —  Three  commissioners  appointed  for 
two  years  by  governor  and  senate ;  commission 
shall  "visit  each  county"  twice  each  year  and 
examine  railways  and  warehouses ;  may  bring 

1  Laws,  1899,  no.  39,  §  6. 

2  Consult  Georgia  commission  cases:  5  I.  C.  C.  324;  99  Fed. 
Rep.  52;   168  U.  S.  144. 

173 


RAILWAY    LEGISLATION 

action  in  any  county  court  for  violations  of  law ; 
attorney-general  may  compel  compliance  with 
orders  of  commission ;  commission  in  its  report 
shall  pay  especial  attention  to  the  possibility  of 
classifying  railways  in  regard  to  rates  and  fares ; 
may  employ  civil  engineers. 

Indiana.  —  No  commission. 

Iowa.  —  Three  commissioners  elected  for  three 
years ;  commission  has  general  supervision  over 
railways,  and  shall  investigate  matters  relating 
thereto ;  recommend  changes,  examine  bridges 
semiannually,  subpoena  witness,  administer  oath, 
and  enforce  orders  through  district  courts,  but 
the  same  court  may  also  issue  injunctions  if  the 
orders  of  the  commission  seem  unjust.  (Marked 
similarity  between  this  and  the  federal  act  regu- 
lating commerce.) 

Kansas.  —  Kansas  commission  law  recently  de- 
clared unconstitutional,  but  as  showing  the  trend 
of  legislation,  salient  features  of  that  law  are  here 
inserted.  The  law  created  a  court  of  visitation 
composed  of  three  members  —  one  chief  justice 
and  two  associates  —  elected  for  four  years.  This 
commission  had  power  to  compel  adherence  to 
impartial  and  reasonable  train  service ;  require  the 
construction  of  depots,  switches,  and  other  facili- 
ties;  regulate  intersections  and  joint  operation  of 
roads ;  prescribe  the  movement  of  trains  and  nec- 
essary measures  of  safety  for  passengers  and 
employees ;  require  uniform  appliances ;  hear  and 
decide  cases  relating  to  freight  rates,  switching 

174 


GENERAL    RAILWAY    LEGISLATION 

and  demurrage  charges,  and  to  apportion  such 
charges  among  connecting  railways ;  regulate 
rates  for  carload  and  less  than  carload  lots,  includ- 
ing live  stock ;  classify  freight  and  restrict  rail- 
ways in  the  exercise  of  their  powers  to  charter 
privileges,  and  compel  obedience  to  railway  law. 

Kentucky. — Three  commissioners,  elected  by 
districts  for  four  years.  No  power  to  fix  rates, 
but  a  law  of  1899  requires  commission  to  hear 
complaints  of  extortion  and  excessive  rates  "  when 
complaints  shall  be  made  to  the  railway  commis- 
sioners accusing  any  railroad  or  corporation  of 
charging,  collecting,  or  receiving  extortionate 
freight  or  passenger  rates  over  its  line  or  lines  of 
railroads  in  the  commonwealth,  or  when  said  com- 
mission shall  receive  information  or  have  reason 
to  believe  that  such  rate  or  rates  are  being 
charged,  collected,  or  received,  it  shall  be  the  duty 
of  said  commission  to  hear  and  determine  the 
matter  as  speedily  as  possible."1  In  addition 
commission  gives  notice,  fixing  time  and  place  of 
hearing,  whereupon  rates  may  be  agreed  upon  and 
put  in  operation  on  ten  days'  notice.  The  com- 
mission shall  also  examine  through  rates  and 
bring  proper  matters  before  the  Interstate  Com- 
merce Commission.  It  may  order  improvements 
and,  if  its  advice  is  not  heeded,  call  the  attention 
of  the  attorney-general  and  the  legislature  to  those 
matters. 

Louisiana.  — Three  commissioners,  elected  for  six 

1  Laws,  1899,  ch.  2. 


RAILWAY    LEGISLATION 

years  by  districts,  shall  inspect  railways ;  hear  and 
determine  complaints  against  classification  of 
rates ;  compel  attendance  of  witnesses.  Sheriffs 
refusing  to  execute  and  enforce  process  or  order  of 
commission  subject  to  penalty  as  in  similar  civil 
cases.  "  It  shall  be  lawful  for  the  commission  to 
fine  and  commit  to  the  parish  prison  of  the  parish 
where  the  commission  may  be  in  session  at  that 
time  any  witness  or  other  person  adjudged  to  be 
in  contempt  of  the  authority  of  said  commission, 
the  same  as  in  cases  of  contempt  before  the  district 
courts  of  this  state."  Railways  may  appeal  from 
decisions  of  commission  to  courts,  pending  which 
commission  orders  are  suspended. 

Maine.  —  Three  commissioners  for  three  years, 
appointed  by  the  governor  and  council.  Commis- 
sion shall  examine  railways  and  rolling  stock,  and 
give  certificate  showing  their  condition  to  railway 
companies ;  may  reduce  speed  on  unsafe  roads ; 
settle  disputes  among  connecting  lines ;  order 
erection  of  stations  ;  investigate  accidents  ;  make 
rulings  as  to  crossings,  which  are  final,  unless 
appealed  from  within  fourteen  days ;  compliance 
with  orders  may  be  compelled  by  court. 

Maryland.  — No  commission. 

Massachusetts.  — Three  commissioners,  appointed 
for  three  years  by  governor  and  council ;  commission 
to  exercise  supervision  of  railways ;  to  see  that 
laws  are  complied  with  ;  to  inform  corporations  of 
necessary  improvements,  charges,  etc. ;  to  examine 
condition  of  roads  on  complaint  of  city  or  town 

176 


GENERAL    RAILWAY    LEGISLATION 

authorities;  to  investigate  causes  of  accidents;  to 
be  furnished  with  information  as  to  condition, 
management,  etc.,  of  roads ;  to  examine  books, 
accounts,  etc.;  on  request,  to  publish  financial 
condition  ;  summon  witnesses ;  employ  experts ; 
approve  by-laws  of  railway  relief  societies. 

Michigan.  —  One  commissioner,  appointed  by 
governor  and  senate  for  two  years.  Commissioner 
shall  examine  condition  and  management  of  rail- 
ways ;  examine  tracks ;  hear  petitions  for  better 
railway  facilities ;  subpoena  witnesses ;  arbitrate 
on  joint  use  of  stations  and  terminal  facilities ; 
prescribe  uniform  systems  of  accounting ;  pre- 
scribe forms  of  signals  and  order  automatic  bells  at 
crossings. 

Minnesota. — Three  commissioners  elected  for 
four  years.  Commission  to  investigate  rates, 
fares,  and  classifications ;  visit  each  county  annu- 
ally ;  hold  sessions  in  any  part  of  state ;  inquire 
into  management  of  common  carriers,  and,  at  dis- 
cretion of  commission,  these  may  be  sued  for  non- 
compliance  with  orders  ;  attorney-general  ex  officio 
attorney  for  commission  ;  commission  notifies  car- 
riers of  petitions  and  complaints,  and  fixes  rates 
either  on  complaint  or  on  its  own  motion ;  sub- 
poena witnesses ;  prescribe  uniform  systems  of 
accounts ;  may  require  uniform  gauges  if  thought 
necessary  after  examination. 

Mississippi. — Three  commissioners,  elected  for 
four  years  by  districts.  Commissioners  may  apply 
to  courts  of  chancery  to  compel  obedience  to  state 
N  177 


RAILWAY    LEGISLATION 

laws,  lawful  orders,  decisions,  and  determinations. 
"  Every  railroad  ought  to  use  the  same  classifica- 
tion of  freight,  and,  as  far  as  practicable,  the  rail- 
road commission  shall  require  them  to  do  so,  and 
to  conform  the  classification  to  that  in  use  in  inter- 
state commerce,  when  practicable/'1 

Missouri.  —  Three  commissioners,  elected  for  six 
years.  Commissioners  shall  prosecute  complaints 
involving  unreasonable  rates  before  Interstate 
Commerce  Commission,  subpoena  witnesses,  call 
for  papers  and  books,  and  secure  other  evidence. 
Courts  may  even  revise  orders  of  commission. 
Commission  may  classify  freight  and  reduce  rates  ; 
institute  proceedings  against  railway  companies 
which  promote  the  consolidation  of  parallel  lines, 
and  prosecute  companies  for  preventing  competi- 
tion between  express  companies.  The  commission 
also  has  power  to  establish  connections  between 
competing  lines. 

Montana.  —  No  commission. 

Nebraska.  —  Board  of  transportation  composed 
of  attorney-general,  secretary  of  state,  auditor, 
treasurer,  and  commissioner  of  public  lands.  The 
law  prescribes  classification  of  freight  in  full.  The 
commission  shall  inquire  into  the  management  and 
business  of  railways  for  the  protection  of  public 
interests  ;  subpoena  witnesses  and  invoke  power  of 
courts;  courts  may  compel  obedience  by  injunc- 
tion, but  railways  have  power  to  appeal  to  supreme 
court.  Proceedings  of  commission  accepted  as 

1  Rev.  Stat.  1892,  §  4,  318. 
I78 


GENERAL    RAILWAY    LEGISLATION 

prima  facie  evidence ;  commission  shall  report 
investigations  in  writing. 

Nevada.  —  No  commission. 

New  Hampshire.  —  Three  commissioners,  ap- 
pointed by  governor  and  council  for  three  years. 
Commission  has  power  to  fix  maximum  rates  ;  in- 
vestigate accidents  and  complaints ;  administer 
oaths,  summon  witnesses,  and  compel  them  to 
testify ;  institute  proceedings  against  railways  for 
violation  of  law ;  examine  railways  annually ;  in- 
vestigate accidents,  and  report  to  supreme  court 
on  necessity  of  new  roads,  bridges,  or  on  the 
desirability  of  consolidations. 

New  Jersey.  — No  commission. 

New  Mexico.  —  No  commission. 

New  York.  —  Three  commissioners,  appointed 
for  five  years  by  governor  and  senate.  Commis- 
sion exercises  general  supervisory  powers  over 
railways.  Attorney-general  may  prosecute  rail- 
ways for  failure  to  comply  with  orders  of  commis- 
sion ;  investigate  accidents  ;  make  recommendations 
after  hearing,  for  which  the  attendance  of  witnesses 
is  compulsory ;  make  rulings  on  grade  crossings, 
from  which  rulings  appeal  may  be  taken  within  sixty 
days ;  no  mortgages,  except  purchase  mortgages, 
shall  be  issued  without  consent  of  the  commission. 

North  Carolina.  —  Corporation  commission,  com- 
posed of  three  members,  elected  for  six  years. 
Commission  has  general  supervisory  powers ;  may 
establish  rates ;  prevent  discriminations,  rebates ; 
call  the  attention  of  the  Interstate  Commerce  Com- 
179 


RAILWAY    LEGISLATION 

mission  to  proper  cases ;  investigate  books  and 
papers ;  examine  officers,  and  exercise  powers  and 
jurisdiction  of  a  court  of  general  jurisdiction  on 
subjects  embraced  in  the  act ;  establish  stations, 
and  pass  upon  applications  for  discontinuing  the 
same  ;  investigate  accidents  ;  act  as  arbitrators  be- 
tween disagreeing  companies.  In  fixing  maximum 
rates  the  commission  shall  always  consider  the 
value  of  services  performed  and  other  factors  en- 
tering into  the  composition  of  rates.  The  com- 
mission may  make  special  rates,  with  a  view  of 
developing  certain  industries. 

North  Dakota.  —  Three  commissioners,  elected 
for  two  years.  Commission  shall  have  general 
supervision  ;  inquire  into  violations  of  law,  neglect 
of  duty,  etc.  Attorney-general  ex  officio  counsel 
to  enforce  decrees  of  commission.  Hearings  shall 
be  given  on  petitions,  for  which  witnesses  may  be 
subpoenaed  and  oaths  administered.  Where  rail- 
way companies  cross  on  same  grade,  commission 
may  compel  construction  of  Y's. 

Ohio.  —  One  commissioner,  appointed  for  two 
years  by  governor  and  senate.  Commissioner 
shall  examine  complaints ;  subpoena  witnesses ; 
call  for  books ;  enforce  acts  against  railways  hav- 
ing inexperienced  employees,  the  act  regulating 
height  of  bridges,  automatic  couplers,  limiting  the 
hours  of  service  of  employees,  fire  extinguishers 
on  train,  and  interlocking  switches  (interlocking 
switches  are  compulsory) ;  investigate  accidents. 

Oregon.  —  No  commission.  Commission  estab- 
180 


GENERAL    RAILWAY    LEGISLATION 

lished  in  1887,  and  in  1898  commission  law,  and 
with  it  practically  all  other  railway  legislation,  was 
repealed. 

Pennsylvania.  —  Secretary  of  internal  affairs, 
elected  for  four  years,  appoints  a  deputy,  who 
supervises  railroads.  The  secretary  of  internal 
affairs  shall  supply  the  blanks  for  reports  of  rail- 
way companies,  copies  of  which  shall  be  sent  to 
the  governor  and  members  of  legislature ;  such  re- 
ports filed  in  bureau  of  railroads.  Special  reports 
may  be  required.  Bureau  of  railroads  shall  see 
that  corporations  act  within  legal  limits,  hear  com- 
plaints, and,  if  well  founded,  instruct  attorney-gen- 
eral to  institute  proceedings  against  offending 
companies. 

Rhode  Island.  —  One  commissioner,  appointed 
by  governor  for  three  years.  Commissioner  shall 
"personally  examine  into  the  proceedings  of  any 
railroad  corporation,"  secure  compliance  with  laws, 
investigate  accidents,  subpoena  witnesses,  approve 
or  disapprove  the  abandonment  of  stations,  order 
flagmen  at  crossings,  and  make  orders  in  regard  to 
grade  crossings,  from  which  an  appeal  may  be 
taken.  Commissioner  shall  report  annually  to  the 
general  assembly,  "so  far  as  the  public  interest 
may  require,  with  such  suggestions  and  recommen- 
dations as  he  may  deem  necessary  or  expedient." 

South  Carolina. — Three  commissioners,  elected 
by  general  assembly  for  six  years.  Commission 
shall  have  supervision  of  all  railways  ;  investigate 
complaints,  accidents,  etc. ;  may  require  informa- 

181 


RAILWAY    LEGISLATION 

tion  concerning  rates  with  connecting  roads ;  may 
ask  additional  questions  with  respect  to  schedules, 
and  make  requests  and  give  advice;  investigate 
accidents.  Jointly  with  railway  companies  com- 
mission may  make  special  rates  for  the  purpose  of 
developing  industries  of  the  state.  No  new  rail- 
way may  be  opened  without  examination  and  cer- 
tification of  commission.  Railway  company  may 
appeal  from  decisions  of  commission  to  circuit  court. 

South  Dakota.  —  Three  commissioners,  elected 
at  large  for  six  years.  Commission  shall  investigate 
complaints  and  furnish  report  of  investigation  to 
complainants;  subpoena  witnesses  ;  examine  books; 
fix  schedules  of  maximum  rates  and  classifications ; 
establish  joint  rates  on  petition  of  disagreeing  rail- 
way companies ;  exercise  general  supervision,  and 
institute  action  to  compel  compliance  with  law. 

Tennessee. — Three  commissioners,  elected  for 
six  years  by  grand  divisions  of  the  state.  Commis- 
sion shall  supervise  and  fix  rates,  charges,  and 
regulations  of  freight  and  passenger  tariffs  ;  correct 
abuses;  prevent  unjust  discriminations  and  extor- 
tions. Commission  may  subpoena  witnesses,  ex- 
amine books,  and  compel  testimony  to  be  given, 
but  no  railway  employee,  officer,  etc.,  shall  be  sub- 
ject to  legal  process  on  basis  of  his  own  testimony  ; 
investigate  through  rates  and,  in  case  of  violations 
of  law,  report  to  the  Interstate  Commerce  Com- 
mission ;  attorney-general  conduct  proceedings. 
Circuit,  chancery,  and  justices*  courts  shall  have 
jurisdiction  of  cases  arising  out  of  the  act. 

182 


GENERAL    RAILWAY    LEGISLATION 

"Railway  companies  may  make  contracts  with 
coal,  mining,  and  manufacturing  companies  or  per- 
sons for  special  rates  of  freight  not  to  be  controlled 
by  this  article."  *  This  section  relates  to  long  and 
short  hauls,  and  should  be  read  in  connection  with 
section  10,  chapter  24,  laws  of  1897,  which  provides 
that  nothing  in  the  act  shall  be  construed  to  pre- 
vent railways  from  giving  special  rates  to  encour- 
age infant  manufacturing  industries,  and  for  the 
encouragement  of  any  other  new  industry,  or  for 
the  transportation  of  any  perishable  goods. 

"That  it  shall  be  the  duty  of  the  railroad  com- 
missioners, by  correspondence  or  otherwise,  to  con- 
fer with  the  railroad  commissioners  of  other  states 
and  the  Interstate  Commerce  Commission,  and 
such  persons  from  states  which  have  no  railroad 
commissions  as  the  governors  of  such  states  may 
appoint,  for  the  purpose  of  agreeing,  if  practicable, 
upon  a  draft  of  statutes  to  be  submitted  to  the  legis- 
lature of  each  state,  which  shall  secure  uniform 
control  of  railway  transportation  in  the  several 
states,  and  from  one  state  into  or  through  another 
state,  as  will  best  serve  the  interests  of  trade  and 
commerce  of  the  whole  country." 

Texas.  — Three  commissioners,  appointed  by  gov- 
ernor and  senate,  holding  office  for  same'  period 
with  governor.  Commission  shall  adopt  all  neces- 
sary rates,  charges,  and  regulations  to  govern  and 
regulate  railroad  freight  and  passenger  rates ;  to 
correct  abuses  and  prevent  unjust  discriminations 

1  Rev.  Stat.  1896,  §  3060. 

183 


RAILWAY    LEGISLATION 

and  extortion ;  may  change  rates  and  fix  same  for 
empty  and  loaded  cars.  Emergency  freight  rates 
established  by  law  as  amended  in  1899  :  •  •  •  "  Said 
commission  shall  have  power,  when  deemed  by  it 
necessary,  to  prevent  interstate  rate  wars  and  injury 
to  the  business  interests  of  the  people  or  railroads 
of  this  state,  or  in  case  of  any  other  emergency  to 
be  judged  by  the  commission ;  and  it  shall  be  its 
duty  to  temporarily  alter,  amend,  or  suspend  any 
existing  freight  rates,  tariffs,  schedules,  orders, 
and  circulars  on  any  railroad,  or  part  of  railroad, 
in  this  state,  and  to  fix  freight  rates  where  none 
exist." 

"Whereas  interstate  cut  freights  from  other 
states  to  Texas  are  frequently  made  an4  put  in 
force  on  three  days'  notice  to  the  Interstate  Com- 
merce Commission,  to  remain  in  force  often  for 
only  ten  days  at  a  time,  suspending  the  regular 
rates  for  that  time ;  and  whereas  these  temporary 
cut  rates  are  intended  and  actually  do  benefit  only 
a  favored  few,  who  are  notified  in  advance ;  and 
whereas  such  cut  rates  tend  to  demoralize  traffic 
and  create  rate  wars,  to  the  great  detriment  of 
Texas  railway  companies  and  the  public  generally ; 
and  whereas  under  the  law  as  it  now  exists  emer- 
gency rates  to  meet  such  cuts  and  prevent  such 
rate  wars  cannot  be  put  in  force  until  three  days' 
notice  to  the  roads  interested,  an  imperative  public 
necessity  and  emergency  exists  for  the  suspension 
of  the  constitutional  rule,  requiring  bills  to  be 
read  on  three  several  days,  and  this  bill  shall 

184 


GENERAL    RAILWAY    LEGISLATION 

therefore  take  effect  and  be  in  force  from  and  after 
its  passage." 

Utah.  —  No  commission. 

Vermont. — Three  commissioners,  appointed  by 
the  governor  and  senate  for  two  years.  Commis- 
sion exercises  general  supervision  ;  examines  books 
and  witnesses  ;  may  employ  experts  ;  make  recom- 
mendations and  apply  to  supreme  court  to  compel 
compliance  with  its  orders ;  inquire  into  lack  of 
connections ;  recommend  repairs,  improvements, 
etc.  ;  and,  in  general,  see  that  the  laws  are  com- 
plied with.  So  far  as  consistent  with  state  laws 
commission  shall  conform  to  the  rules,  etc.,  of 
the  Interstate  Commerce  Commission. 

Virginia.  —  One  commissioner  for  two  years, 
elected  by  general  assembly.  Commission  shall 
inquire  into  and  examine  conditions  of  railways, 
and,  in  general,  bring  about  obedience  to  law ;  on 
complaint  of  mayor,  aldermen,  councils,  certain 
judges,  commission  shall  investigate  and  report  to 
the  board  of  public  works,  composed  of  governor, 
auditor,  and  treasurer.  Persons  suffering  from 
violation  of  law  may  seek  relief  in  court  of  equity 
through  commission.  Commission  shall  report  on 
actual  working  of  the  railway  system  in  its  relation 
to  the  business  and  prosperity  of  the  state ;  make 
suggestions  as  to  general  railway  policy ;  investi- 
gate accidents ;  and  require  railway  companies  to 
furnish  information  regarding  the  management  and 
operation  of  roads. 

Washington.  —  No  commission. 


RAILWAY    LEGISLATION 

West  Virginia.  —  No  commission. 

Wisconsin.  — One  commissioner,  elected  for  two 
years.  Commissioner  shall  inquire  into  neglect  of 
duty  or  violations  of  law;  inspect  railways,  and 
ascertain  their  pecuniary  conditions ;  notify  rail- 
way companies  of  complaints,  and  give  notice  of 
hearing ;  subpoena  witnesses ;  request  attorney- 
general  to  prosecute  in  behalf  of  commission. 
Decisions  of  commissioner  final  unless  appealed 
from  within  twenty  days. 

Wyoming.  —  No  commission. 


186 


PART    III 

THE   PAST   AND   FUTURE   OF  THE 
INTERSTATE   COMMERCE   COMMISSION 


CHAPTER   I 

EVENTS  PRECEDING  THE  ACT  TO  REGULATE 
COMMERCE,   1887 

DURING  the  first  half  of  the  nineteenth  century 
federal  railway  legislation  dealt  chiefly  with  rights 
of  way  through  public  lands,  and  with  the  remission 
of  duties  on  railway  materials  imported  from 
abroad.  The  Pacific  railway  agitation  was  begun 
during  the  first  and  continued  into  the  third  quarter 
of  the  century.  The  first  land  grant  act  was  passed 
in  1850.  *  In  1866  the  "  charter  of  the  American 
railway  system  "  became  a  law.  It  provided  that 
"every  railroad  company  in  the  United  States 
whose  road  is  operated  by  steam,  be  and  is  hereby 
authorized  to  carry  upon  and  over  its  road,  boats, 
bridges,  and  ferries,  all  passengers,  troops,  gov- 
ernment supplies,  mails,  freight,  and  property,  on 
their  way  from  any  state  to  another  state,  and  to 
receive  compensation  therefor;  and  to  connect 
with  roads  of  other  states  so  as  to  form  continuous 
lines  for  the  transportation  of  the  same  to  the 
place  of  destination.'*  In  1868  the  House  com- 

1  J.  B.  Sanborn,  Congressional  Grants  of  Land  in  Aid  of  Rail- 
ways, Bulletin,  University  of  Wisconsin,  Vol.  II.  no.  3,  in   Eco- 
nomics, Political  Science  and  History  Series. 
189 


RAILWAY    LEGISLATION 

mittee  on  roads  and  canals  —  the  new  committee 
to  handle  railway  legislation  did  not  appear  until 
several  years  later  —  submitted  a  report  in  which 
strong  reasons  were  advanced  in  favor  of  a  liberal 
interpretation  of  the  powers  of  congress  over 
interstate  commerce.1  The  committee  had  been 
instructed  to  inquire  whether  congress  had  power 
to  regulate  interstate  railways  so  as  to  secure 
safety  *)f  passengers,  uniform  and  equitable  rates, 
and  adequate  connections  with  other  railways. 
An  affirmative  answer  was  given  to  every  one  of 
these  points  of  inquiry,  but  the  committee  did  not 
report  a  bill.  This  they  refused  to  do  because  the 
requisite  facts  for  the  drafting  of  such  a  bill  were 
not  at  hand.  Instead,  it  was  recommended  that 
another  committee  be  appointed  to  collect  the  data 
necessary  for  intelligent  action.  Meanwhile  the 
Patrons  of  Husbandry  had  come  upon  the  scene. 
From  1867  to  1872  the  founders  of  the  order 
struggled  chiefly  alone.  In  1872  the  state  grange 
of  Iowa  was  founded,  and  by  the  close  of  that 
year  about  thirteen  hundred  granges  had  been 
organized  in  various  parts  of  the  country.  In 
two  years  more  the  order  had  spread  over  the 
whole  country,  with  an  aggregate  of  over  20,000 
lodges.  In  1874  the  Grand  Master's  address2 
alluded  to  exorbitant  and  varying  rates,  discrimina- 
tions, and  uncertainties.  "  When  we  plant  a  crop 

1  E.  J.  James,  The  Railway  Question,  Am.  EC.  Ass'n,  1887. 

2  Proceedings,  National  Grange  of  Patrons  of  Husbandry,  1874, 
p.  14. 

I90 


RISE    OF    FEDERAL    LEGISLATION 

we  can  only  guess  what  it  will  cost  to  send  it  to 
market,  for  we  are  the  slaves  of  those  whom  we 
created.  ...  In  our  inmost  soul  we  feel  deeply 
wronged  at  the  return  made  for  the  kind  and 
liberal  spirit  we  have  shown  them  "  (i.e.  the  rail- 
ways). Sentiments  like  these,  frequently  ex- 
pressed in  vehement  language  and  repeated  time 
without  number  in  subordinate  granges,  created  a 
profound  influence  on  public  opinion  and  political 
parties.  Congress  was  petitioned  to  establish  a 
department  of  agriculture,  to  revise  the  patent 
laws,  improve  the  Mississippi  River,  and  above  all 
to  enact  suitable  railway  legislation.  "We  hold 
each  senator  and  representative  responsible  for 
his  action  upon  the  subject-matter"  set  forth  in 
the  resolutions.  The  President's  message  of 
December,  1872,  gave  the  stimulus  to  the  appoint- 
ment of  a  Senate  committee  of  seven  known  as  the 
Windom  committee.  The  report  of  this  committee 
"  is  interesting  because  it  contains  the  first  presenta- 
tion of  a  comprehensive  plan  of  regulation  of  the 
whole  subject  of  commerce  between  the  states,  as  it 
has  constituted  itself  since  the  introduction  of  the 
railway."1  The  primary  view  of  the  report  was 
low  rates  and  the  preservation  of  competition. 
The  crisis  of  1873  tended  to  divert  attention  from 
discriminations  and  other  abuses  to  the  absolute 
level  of  rates,  it  being  assumed  that  cheap  rates 
would  afford  relief.  Among  the  measures  recom- 
mended by  the  Windom  committee  were  publicity 

1  E.  J.  James,  The  Railway  Question,  p.  35. 
191 


RAILWAY    LEGISLATION 

of  rates ;  prohibition  of  combinations,  stock-water- 
ing, and  a  greater  charge  for  a  shorter  haul  over 
the  same  line ;  reforms  in  the  shipment  of  grain 
and  in  the  operation  of  freight  lines ;  and,  finally, 
the  establishment  of  a  bureau  of  commerce.  In 
the  meanwhile  states  like  Illinois,  Iowa,  Wisconsin, 
and  Minnesota  resorted  to  vigorous  and  even  dras- 
tic legislation.  Public  opinion  in  the  rural  districts 
had  reached  a  white  heat.  Men  in  public  life 
dependent  upon  popular  suffrage  vied  with  one 
another  to  meet  the  wishes  of  the  "  grangers  "  and 
their  friends.  The  indiscriminate  distribution  of 
seeds  was  an  incident  in  this  general  rivalry  to  sat- 
isfy, conciliate,  and  appease.  In  1878  the  Reagan 
bill,  one  of  the  forerunners  of  and  a  contributor 
to  the  present  interstate  commerce  law,  was  first 
introduced.  Uninterrupted  discussions  in  and 
outside  of  Congress  resulted  in  the  appointment  of 
the  Cullom  committee,  whose  report  is  in  a  sense 
the  corner-stone  of  the  act  to  regulate  commerce. 
The  report  was  made  in  1886.  The  chief  ground  of 
contention  was  shifted  from  the  level  of  rates  to  that 
of  discriminations  in  their  various  forms.  Great 
railway  combinations  had  been  formed.  Through 
rate  necessities  of  competitive  markets,  areas,  and 
railways  had  reduced  rates  on  staple  commodities, 
especially  on  grain  and  other  agricultural  products 
shipped  in  large  quantities.  Fierce  railway  wars 
had  been  fought  and  abnormally  low  rates  enforced 
during  the  periods  of  conflict.  Individual  railways, 
individual  shippers,  and  certain  localities  rose  and 

192 


RISE    OF    FEDERAL    LEGISLATION 

fell  with  the  fortunes  of  the  railway  wars.  All 
this  tended  to  concentrate  public  attention  upon 
the  abuses  of  reckless  railway  administration. 
These  abuses  are  reflected  in  detail  in  the  volume 
of  testimony  accompanying  the  report  of  the  com- 
mittee. The  report  proper  refers  to  the  exclusive 
privileges  enjoyed  by  railways  and  the  public  func- 
tions which  they  perform.  These  make  the  relations 
and  obligations  of  railways  to  the  community  and  to 
the  governmental  authority  something  very  dif- 
ferent from  those  of  the  ordinary  corporation, 
and  upon  such  differences  both  the  necessity  and 
justice  of  regulation  rest.  Similar  ground  was 
taken  by  the  Supreme  Court  of  the  United  States 
in  the  leading  case  of  Munn  vs.  Illinois  : l  "  When 
the  owner  of  property  devotes  it  to  a  use  in  which 
the  public  has  an  interest,  he  in  effect  grants  to  the 
public  an  interest  in  such  use,  and  must,  to  the 
extent  of  that  interest,  submit  to  be  controlled  by 
the  public,  for  the  common  good,  as  long  as  he 
maintains  the  use.  He  may  withdraw  his  grant  by 
discontinuing  the  use."  The  committee  further 
pointed  out  the  differences  between  investments 
in  railway  and  ordinary  business  enterprises ;  they 
emphasized  the  public  nature  of  the  railway  busi- 
ness, making  railways  quasi  public  servants  with 
power  to  levy  a  tax  ;  and,  finally,  the  committee 
asserted  that  railways  have  a  right  to  protection 
by  the  state  in  the  enjoyment  of  their  chartered 
privileges.  The  importance  of  lakes,  rivers,  and 

1  94  U.S.  113. 
o  193 


RAILWAY    LEGISLATION 

canals  is  recognized,  and  the  doctrine  of  competition 
among  railways  adhered  to.  On  the  whole,  the 
ideas  expressed  in  the  report  convey  a  feeling  of 
uncertainty  with  respect  to  the  exact  nature  of  the 
legislation  required  and  the  probable  efficacy  of  such 
legislation.  This  uncertainty  prevailed  throughout 
the  debates  on  the  bill  which  finally  became  law,  and 
which,  together  with  the  two  amendments,  will 
be  found  verbatim  in  Appendix  IV.  It  remained 
to  the  Interstate  Commerce  Commission  and  the 
courts  to  give  definiteness  to  the  provisions  of  the 
law.  The  manner  in  which  this  has  been  done 
will  be  shown  in  the  following  chapters. 


194 


CHAPTER   II 

LEADING  PRINCIPLES  OF   THE  DECISIONS  OF  THE 
COMMISSION  l 

THE  decisions  of  the  Interstate  Commerce  Com- 
mission, handed  down  since  its  organization  in 
/  1887,  now  number  293,  some  of  which  cover  two 
or  more  cases  decided  at  the  same  time.  The  facts 
presented  in  this  long  series  of  cases  are  kaleido- 
scopic. A  single  fact  may  appear  a  hundred  times, 
but  it  always  comes  again  in  different  company. 
Never,  perhaps,  does  exactly  the  same  group  of 
facts  reappear  in  exactly  the  same  combination  or 
relationship.  Hence  each  group  of  facts  em- 
braced in  a  case  and  each  decision  based  upon  the 
same  has  an  individuality  of  its  own.  Generally 
speaking,  no  two  cases  are  alike  in  every  respect, 
and  no  rule  of  thumb  can  be  devised  by  which  a 
decision  can  be  rendered.  Yet,  though  each  deci- 
sion has  its  peculiar  characteristics,  an  analysis  and 
comparison  of  many  cases  and  decisions  reveals 
certain  common  elements  or  underlying  principles 
and  views.  To  point  out  these  common  elements, 
views,  and  principles  in  the  decisions  of  the  Inter- 

1  This  and  the  two   following  chapters  were  published  in  the 
Political  Science  Quarterly,  September,  1902. 

195 


RAILWAY    LEGISLATION 

state  Commerce  Commission  is  the  chief  aim  of 
this  discussion. 

The  problems  involved  in  the  decisions  are  pri- 
marily economic,  although  political  and  social 
considerations  are  not  wanting.  As  a  compilation 
of  economic  facts  alone,  tested  and  certified,  the 
decisions  constitute  a  valuable  contribution  to 
industrial  history.  To  know  the  world  as  it  actually 
exists  should  be  a  leading  task  of.  every  man.  The 
Interstate  Commerce  Commission  has  placed  at 
the  disposal  of  the  public  the  most  varied,  the  most 
widely  distributed,  the  most  concrete,  and  the  best 
authenticated  collection  of  facts  relating  to  rail- 
ways in  the  United  States  that  is  available  at  the 
present  time  ;  and  by  means  of  these  facts  we  may 
learn  something  of  the  difficulties  involved  in  rail- 
way transportation  in  this  country.  By  far  the 
greatest  number  of  facts  relate  to  the  problems  of 
competition,  which  in  turn  involve  questions  of 
similarity  and  dissimilarity  of  conditions,  long  and 
short  hauls,  cooperation,  reasonableness  of  rates, 
and  discriminations.  Closely  allied  to  these  ques- 
tions are  those  relating  to  classifications  and  com- 
modity rates.  Standing  somewhat  by  themselves, 
and  yet  not  disconnected,  are  decisions  relating  to 
through  shipments,  foreign  trade,  routing  of  freight, 
etc.  Questions  relating  to  the  enforcement  of  the 
Act  to  Regulate  Commerce  and  to  thegivingof  testi- 
mony make  their  appearance.  The  interpretation 
of  the  act  is  frequently  drawn  into  consideration, 
but  this  feature  of  the  decisions  of  the  commission 

196 


PRINCIPLES   OF    THE    DECISIONS 

can  best  be  associated  with  the  court  decisions 
called  forth  by  the  same.1  All  of  these  topics  have 
numerous  subdivisions  and  ramifications  which 
cross  and  recross  one  another  in  the  complex  net- 
work of  relationships  which  the  railway  as  an 
institution  represents,  and  which  is  the  ultimate 
cause  of  the  kaleidoscopic  nature  of  the  cases 
brought  before  the  commission. 

Competition  and  the  long  and  short  haul.  —  The 
Act  to  Regulate  Commerce  assumes  that  railway 
transportation  is  a  competitive  industry  and  that 
competition  among  carriers  should  be  preserved. 
The  Interstate  Commerce  Commission  has  repeat- 
edly asserted  this  in  its  annual  reports  and  deci- 
sions.2 A  score  of  decisions  relate  primarily  to 
water  competition  in  its  bearing  upon  the  long  and 
short  haul  clause.  The  commission  has  held  that 
the  act  permits  railways  to  meet  but  not  to  extin- 
guish the  competition  of  water  carriers.3  The1 
cheapening  and  regulating  functions  of  water  com- 
petition have  been  generally  recognized;4  but  in 
the  case  of  very  low  rates  on  steel  products  to  San 
Francisco  from  the  Atlantic  and  Mississippi  valley 

1  It  should  constantly  be  borne  in   mind  that  in  this  chapter 
only  the  decisions  of  the  commission  are  considered,  irrespective 
of  the  decisions  of  the  courts. 

2  For  instance,  Annual  Report  (1887),  pp.  37,  40;   Annual  Re- 
port (1898),  p.  20;   Decisions,  I,  I.  C.  C.  319;   2.  52;   4.  131. 

8  7,  224.  Hereafter,  for  the  sake  of  brevity,  the  decisions  will 
be  cited  by  volume  and  page  numbers  only. 

4  Cullom  Committee  Report  (1886);  Johnson,  Inland  Water- 
ways, 61;  Hadley,  Railroad  Transportation,  93-98  and  elsewhere. 

I97 


RAILWAY    LEGISLATION 

points,  compared  with  the  rates  on  the  same  prod- 
ucts from  Pueblo,  the  commission  held  that  water 
competition  is  altogether  inadequate  to  account  for 
the  general  relatively  low  rating  of  lumber,  grain, 
and  other  staple  or  heavy  goods  to  or  between 
inland  points.1 

The  existence  of  .water  competition  and  of  com- 
petition among  railways  has  been  the  ground  upon 
which  railways  have  commonly  petitioned  the  com- 
mission for  relief  under  section  iv  of  the  act.  As 
is  generally  known,  this  is  the  long  and  short  haul 
section,  which  makes  it  unlawful  for  a  railway 
company  "  to  charge  or  receive  any  greater  com- 
pensation in  the  aggregate  for  the  transportation 
of  passengers  or  of  the  like  kind  of  property  under 
substantially  similar  circumstances  and  conditions 
for  a  shorter  than  for  a  longer  distance  over  the 
same  line  in  the  same  direction,  the  shorter  being  \ 
included  in  the  longer  distance."  Obviously  the  ' 
decisions  on  long  and  short  haul  questions  turn 
upon  the  similarity  or  dissimilarity  of  the  condi- 
tions under  which  the  hauls  are  made.  The  com- 
mission has  uniformly  held,  from  the  first,  that 
carriers  must  judge  in  the  first  instance  as  to  the 
similarity  or  dissimilarity  of  the  conditions  ;  and 
that  such  judgment  of  the  carriers  is  not  final,  but 
is  subject  to  the  authority  of  the  commission  and 
of  the  courts  to  decide  whether  an  error  has  been 
committed,  the  burden  of  proof  resting  upon  the 
carrier.  In  the  leading  case,  In  re  Louisville  and 
1  6. 488. 
198 


PRINCIPLES  OF    THE    DECISIONS 

Nashville  R.  R.  Co.,1  the  commission  accepted 
the  existence  of  actual  competition,  which  is  of 
controlling  force  in  respect  to  traffic  important  in 
amount,  as  an  adequate  cause  of  dissimilarity  in 
circumstances  and  conditions.  That  this  competi- 
tion must  be  actual,  of  controlling  force  and  relating 
to  traffic  important  in  amount  has  repeatedly 
been  emphasized  by  the  commission.  "That  com- 
petition with  each  other  of  the  railroads  which 
are  subject  to  the  federal  law  can  seldom,  as  we 
think,  make  out  a  case  of  dissimilar  circumstances 
and  conditions  within  the  meaning  of  the  statute, 
because  it  must  be  seldom  that  it  would  be  reason- 
able for  their  competition  at  points  of  contact  to 
be  pressed  to  an  extent  that  would  create  the  dis- 
parity of  rates  on  their  lines  which  the  statute 
seeks  to  prevent.2  The  position  taken  by  the 
commission  in  this  quotation  has  been  consistently 
maintained  and  strongly  reaffirmed  in  a  recent 
decision,  except  in  so  far  as  the  Supreme  Court 
decisions  in  the  Alabama  Midland  (168  U.  S.  164), 
Behlmer  and  other  cases  have  made  modifications 
necessary.3 

Competition  among  railways,  as  such,  is  not^ 
sufficient  to  make  out  dissimilar  conditions.  Such 
competition  must  exist  under  peculiar  circum- 
stances, and  even  this  competition  can  be  accepted 
as  only  one  of  the  circumstances  and  conditions 

1  I.  31.    The  same  principles  are  restated  entirely  or  in  part  in 
I.  236;   3.  534;   4.  i;  4.  104;   4.  228;   5.  324  and  other  decisions. 
*i.8i;  5.324.  88.346. 

199 


RAILWAY    LEGISLATION 

entering  into  the  case.  Not  one  but  all  the  cir- 
cumstances and  conditions  must  be  made  the  stand- 
ard of  comparison.1  The  competition  of  railways 
not  subject  to  the  act  and  of  foreign  railways  has 
been  regularly  admitted  as  one  of  the  circumstances, 
together  with  those  "rare  and  peculiar  cases  of 
competition  between  railroads  which  are  subject  to 
the  statute,  when  a  strict  application  of  the  general 
rule  of  the  statute  would  be  destructive  of  legiti- 
mate competition."  2  Competition  with  water  car- 
riers may  do  the  same,3  although  in  "  some  parts 
of  the  country  it  is  not  easy  to  separate  railroad 
competition  altogether  from  competition  by  the 
water-ways.  Water  competition  is  not  limited 
in  force  strictly  to  the  points  of  contact  of  water 
and  rail  lines,  but  extends  its  influence  to  an  in- 
definite distance  therefrom,  qualifying  to  greater 
or  less  extent  the  all-rail  rates."  4  "  If  the  compe- 
tition of  water  carriers  at  any  point  is  large,  active 
and  of  controlling  force,  the  all-rail  lines  competing 
for  traffic  at  the  same  point  may  make  rates  that 
are  reasonable  and  just  in  view  of  such  competi- 
tion, and  that  will  enable  them  to  participate  in 
the  traffic.  Railways  are  not  obliged  to  go  out  of 
business  and  leave  it  as  a  monopoly  to  water  car- 
riers "  ;5  nor  can  they,6  under  other  circumstances, 
make  rates  so  low  as  to  drive  the  water  transpor- 
tation out  of  existence. 
(  Conditions  and  circumstances  admitted  as  dis- 

1 1. 436;  5-  !56-          8  4-  104,  744.          6  3<  534. 
2 1.  72.  *  i.  81.  $  7.  224> 

200 


PRINCIPLES   OF   THE   DECISIONS 

similar  and  exceptional  under  section  iv  must  not  f 
be  of  the  carrier's  own  creation  or  connived  at  by 
him.  They  must  be  forced  upon  him  by  circum- 
stances over  which  he  has  no  control  or  which  he 
cannot  control  with  a  reasonable  effort.1  In  a 
petition  2  to  have  the  commission  order  a  railway 
company  to  charge  the  same  proportional  rates  on 
its  line  between  St.  Peter  and  Pierre  that  it  charged 
between  Chicago  and  St.  Peter,  it  was  held  that 
because  of  the  competition  of  a  powerful  rival, 
sparser  population,  snow  blockades,  and  other 
factors  increasing  the  cost  of  transportation  dis- 
similar conditions  existed,  and  the  petition  was 
denied.  In  another  case,3  water  competition,  the 
character  of  the  road,  the  nature  of  the  traffic,  the 
preponderance  of  empty  cars  necessarily  moved 
and  legitimate  competition  with  other  carriers  were 
admitted  as  elements  determining  dissimilarity  of 
conditions.  "  Legitimate  competition  "  was  made 
to  include  transportation  under  circumstances  and 
conditions  that  make  a  low  rate  the  only  alterna- 
tive to  an  abandonment  of  the  business,  provided 
that  the  rate  affords  some  revenue  above  cost,  and 
works  no  material  injustice  to  other  patrons  of  a 
carrier.  When,  however,  such  transportation  is 
carried  on  at  a  loss  and  imposes  a  burden  on  like 
traffic  at  other  points  and  on  other  traffic,  it  is  to 
be  deemed  destructive  and  illegitimate  competi- 
tion. In  a  complaint4  against  blanket  rates  in 

*2.  52;    4.  I3l;    5.324;     8.214.  34.  Ig 

2  2.  73.  *  4.  228. 

201 


RAILWAY    LEGISLATION 

force  on  all-rail  carriers  between  New  York  and 
the  great  oil  fields  of  Pennsylvania,  Ohio  and  West 
Virginia,  on  the  one  hand,  and  California  points, 
on  the  other,  to  the  disadvantage  of  intermediate 
points,  the  commission  held  that  the  competition 
of  all-water  lines,  part-water  and  part-rail  lines, 
part-water  and  pipe  lines  constituted  dissimilarity 
of  conditions  and  justified  a  violation  of  section 
iv.  During  the  World's  Fair  at  Chicago,  for  the 
better  accommodation  of  its  patrons,  a  railway 
established  a  new  route  from  an  Ohio  town 
over  which  the  tickets  could  not  be  sold  except 
by  violating  the  long  and  short  haul  provision. 
The  commission  granted  the  desired  relief.1  Simi- 
lar relief2  was  granted  to  a  railway  in  order  that 
it  might  better  serve  a  region  suffering  from  crop 
failure. 

The  Georgia  Commission  cases 3  decided  that 
the  competition  of  markets  on  different  lines  for 
the  sale  of  commodities  at  a  given  point  served 
by  both  lines  does  not  create  conditions  which 
justify  deviation  from  the  long  and  short  haul 
principle.  To  determine  the  force  and  effect  of 
such  competition,  it  was  further  held,  involves 
commercial  considerations,  such  as  the  advantages 
of  business  location,  the  comparative  economy  of 
production,  the  comparative  quality  and  market 
value  of  commodities,  all  of  which  are  entirely 

i  6.  323.  2  6.  293. 

8  5.  324.  Similar  conclusions  in  7.  224;  and  7.  344  (competition 
between  mines) . 

202 


PRINCIPLES   OF   THE   DECISIONS 

disconnected  from  circumstances  and  conditions 
under  which  transportation  is  conducted.  Various 
other  grounds  for  a  refusal  of  relief  under  section  vi 
have  been  indicated  by  the  commission.  Among 
these  are :  disturbances  in  rates,  whether  secret  or 
open  \l  unjust  and  unreasonable  rates  on  the  part 
of  a  competitor ; 2  potential  competition ; 3  a  longer 
line  on  part  of  a  competitor ; 4  the  fact  that  a  com- 
modity is  foreign  merchandise  ;6  the  mere  situation 
on  a  navigable  river;6  competition  of  carriers 
subject  to  the  act.7  The  problem  involved  in 
competition  among  railways  will  be  discussed  more 
fully  in  connection  with  court  decisions.  However, 
one  phase  of  it,  the  trade-centre  theory,  may  be 
noticed  in  this  place. 

In  the  territory  south  of  the  Potomac  and  Ohio 
and  east  of  the  Mississippi,  known  as  Southern 
territory  and  controlled  by  the  Southern  Railway 
and  Steamship  Association,  it  has  been  customary 
to  establish  rates  to  competitive  stations  and  make 
charges  to  non-competitive  or  local  stations  by 
adding  to  the  rate  of  a  competitive  point  the  local 
rate  from  such  point  to  the  local  destination,  taking 
that  competitive  rate  and  that  local  rate  which  will 
produce  the  lowest  combination,  regardless  of 
whether  the  competitive  or  basing  point  is  beyond 
the  local  destination  or  not.8  Whenever  the  haul 

*7. 61.  84.104.  64.  447. 

2  2.  231.  *  g.  346.  6  It  236. 

7  6.  632  and  others  cited  above. 

8  Annual  Report,  I.  C.  C.  (1892),  p.  18;   6.  343  and  cases  quoted; 
2.  25;   3.  19;  4.  686;   5.  96. 

203 


RAILWAY    LEGISLATION 

to  the  competitive  point  or  " trade  centre"  is 
longer  than  that  to  the  non-competitive  point  for 
which  a  greater  charge  is  made,  the  haul  being 
made  over  the  same  line  in  the  same  direction,  the 
long  and  short  haul  principle  is  violated,  and  the 
non-competitive  point  can  bring  action  against 
the  carrier  under  section  iv.  The  trade  centre 
method  is  satisfactory,  of  course,  to  the  "  centres  " 
which  it  establishes  and  maintains,  but  brings  dis- 
advantage to  smaller  "  non-competitive  "  towns  and 
rural  communities.  What  shall  and  what  shall  not 
be  made  a  trade  centre  is  finally  decided  by  an 
arbitrary  authority  ;  and  no  matter  how  good  the 
intentions  the  local  or  non-competitive  points  are 
unable  to  develop  their  industries  under  the  same 
advantages  that  are  enjoyed  by  the  competitive, 
basing,  or  distributive  points,  which  have  been 
made  such  not  necessarily  by  any  normal  and  natural 
process  of  industrial  development,  but  by  chance 
or  caprice  or  both.  Contrary  to  the  contentions  of 
several  carriers,  the  Commission  has  refused  to 
admit  that  the  existence  of  such  "  trade  centres," 
or  the  competition  between  them,  creates  a  dis- 
similarity of  conditions  within  the  meaning  of 
section  iv.  It  has  repeatedly  condemned  the 
trade-centre  idea  as  interfering  with  the  natural 
course  of  trade,  establishing  arbitrary  advantages, 
and  violating  both  the  spirit  and  the  letter  of  the 
act  to  regulate  commerce.  It  has  held  that 
trade  centres  are  not  entitled  to  more  favorable 
rates  than  small  towns  for  which  they  form  dis- 

204 


PRINCIPLES   OF  THE   DECISIONS 

tributing  centres ;  but  no  interference  has  been 
attempted  where  small  towns  get  rates  as  favorable 
as  the  larger  ones  ; 1  and  the  equalization  2  of  rates 
between  small  and  large  towns  to  do  away  with 
former  special  favors  does  not  constitute  a  ground 
for  complaint.3 

The  Question  of  Rates.  — The  kernel  of  the  raiU 
way  problem  is  the  question  of  rates.  Few  topics 
of  importance  in  finance  or  administration  or  any 
other  phase  of  railway  transportation  can  be  inves- 
tigated without  sooner  or  later  touching  upon  rates 
as  the  decisive  consideration.  Upon  no  subject 
has  the  Commission  rendered  so  many  decisions 
as  upon  this.  A  long  line  of  cases  has  arisen 
directly  out  of  the  general  question  of  reasonable 
rates ;  another  out  of  discrimination  in  rates ; 
others,  and  some  of  the  most  important,  out  of 
questions  connected  with  exports  and  imports ;  and 
about  a  dozen  groups  of  decisions  or  parts  of  de- 
cisions deal  with  commodity  rates  and  rates  on 
special  articles. 

The  terms  "  reasonable  and  just,"  "  unreasonable 
or  unjust,"  "  undue  or  unreasonable  preference  or 
advantage,"  "undue  or  unreasonable  prejudice  or 
disadvantage  in  any  respect  whatsoever,"  and  "  un- 
just discrimination,"  as  used  in  the  act  to  regulate 
commerce,  imply  comparison,  and  rates  to  be  law- 

1 2.  25.  2 1. 401. 

8  The  manner  in  which  the  decisions  quoted  on  preceding  pages 
have  been  modified  by  the  courts  will  be  discussed  in  the  two  fol- 
lowing chapters.  „ 

205 


RAILWAY    LEGISLATION 

ful  must  bear  just  relations  to  one  another.1  Rates 
must  be  relatively  fair  and  reasonable  as  between 
localities  similarly  situated  in  essential  respects, 
not  according  to  any  rule  of  mathematical  preci- 
sion, but  in  substance  and  in  fact,  having  regard 
to  the  geographical  and  relative  positions  of  the 
localities,  so  that  one  will  not  be  favored  to  the 
unjust  prejudice  of  the  other.2  Attempts  to  main- 
tain trade  relations,  to  protect  competing  markets, 
to  equalize  commercial  conditions,  and  analogous 
considerations  cannot  justify  unreasonable  rates.3 
Low  charges  on  one  line  cannot  be  made  up  by 
high  charges  on  others,  and  all  charges  should 
have  a  reasonable  relation  to  cost  of  production 
and  to  the  value  of  the  service  to  the  producer  and 
shipper,  but  should  not  be  so  low  on  any  as  to  im- 
pose a  burden  on  other  traffic.4  The  length  and 
character  of  the  haul,  the  cost  of  service,  the  vol- 
ume of  business,  the  condition  of  competition,  the 
storage  capacity,  and  the  geographical  situation  at 
the  different  terminal  points  are  all  elements  of 

(importance  bearing  upon  the  relative  reasonable- 
ness of  the  respective  charges  for  transportation.5 
•  That  rates  should  be  fixed,  says  the  Commission, 
in  inverse  proportion  to  the  natural  advantages 
of  competing  towns  with  the  view  of  equalizing 
commercial  conditions,  is  a  proposition  unsup- 
ported by  law  and  quite  at  variance  with  every 

1  6.  458,  548.  8  6.  195. 

2 1.215;  2.315;  4. 79.  44.48. 

5 1.  230. 

206 


PRINCIPLES  OF  THE  DECISIONS 

consideration  of  justice.1  Each  community  is  en- 
titled to  the  benefits  arising  from  its  location  and 
natural  conditions.  Equality  of  charge  is  required 
under  circumstances  and  conditions  substantially 
similar,  and  relative  equality  is  necessary  in  the 
degree  of  similarity.2  The  degree  of  similarity^ 
is  determined  by  all  the  circumstances  entering 
into  the  case,  and  not  solely  by  one  standard  of 
comparison. 

It  is  quite  impossible  to  separate  questions  relat- 
ing to  reasonable  rates,  discriminations,  through 
rates,  etc.,  from  one  another.  Yet  the  subject  of 
discriminations  has  given  rise  to  more  controversy 
and  legislation  than,  perhaps,  any  dozen  other  rail- 
way topics,  and  at  least  brief  separate  treatment  must 
be  accorded  to  it.  In  the  popular  mind  discrim- 
ination means  unjust  discrimination,  and  to  the  eyes 
of  most  legislators  all  discriminations  are  unjust. 
But  the  well-known  illustration  of  the  Delaware 
oyster  town,4  showing  the  necessity  and  justice  of 
discriminations  under  peculiar  circumstances,  could 
be  duplicated  many  times.  While  all  discriminations 
against  individuals,  for  like  and  contemporaneous 
services  rendered  under  "  similar  circumstances 
and  conditions/'  are  unjust,  discriminations  against 
localities  may  be  unavoidable  and  even  just.  Six- 
teen state  constitutions  and  the  laws  of  three- 
fourths  of  the  states  prohibit  all  discriminations.5 

1 1.  215;  5*  264;  7.  180.  2  4.  79.  8 1.  436. 

4  Hadley,  Railroad  Transportation,  p.  116. 
6  Part  II,  ch.  III. 

207 


RAILWAY    LEGISLATION 

The  Interstate  Commerce  Act  prohibits  and  declares 
unlawful  unjust  discriminations,  thus  reserving  to  the 
Commission  discretionary  administrative  powers  in 
case  of  discriminations  which,  to  that  body,  do  not 
appear  to  be  unjust.  While  every  community  is 
entitled  to  the  benefits  arising  from  its  location 
and  natural  conditions,1  and  the  Commission  is  not 
authorized  to  grant  special  privileges,2  it  may  never- 
theless permit  preferences  among  localities  when 
sufficient  cause  exists,3  and  these  preferences  are 
not  undue.  .  • 

Among  the  forms  of  discrimination  pronounced 
unlawful  by  the  Commission  are  the  following : 
illegitimate  use  of  private  cars  4  or  cars  not  owned 
by  the  railway  company ;  discounts  based  on 
quantity  of  freight  received  by  a  single  shipper,6  or 
excessive  differences  in  rates  on  car-load  and  less 
than  car-load  shipments  ; 6  combination  rates  favor- 
ing the  knowing  shipper;7  mileage  tickets  not 
sold  impartially ; 8  refusal 9  to  carry  goods  over  the 
route  directed  by  the  shipper,  and  directing  traffic 
arbitrarily  without  good  reasons  ;  employment 10  of 
ticket  brokers  to  sell  tickets  at  reduced  rates  on 
commission  ;  party  rates  lower  than  contemporane- 
ous rates  for  single  passengers  j11  lower  rates12  from 
an  important  centre  and  not  correspondingly  lower 

1 2. 540.  7 1.  230;  2.  i. 

2 1. 17.  8 1. 156. 

8  8.  93,  290.  9  7.  43. 

*  I.  374;    2.  90;    4.  630;    4.  265;    5.  193.  10  2.  513. 

6  I.  107.  n  2.  649;    3.  465. 

•  2.  90;  5.  638.  12  8.  214. 

208 


PRINCIPLES   OF  THE   DECISIONS 

rates  from  intermediate  points,  giving  certain 
shippers  exclusive  rights  over  station  facilities  ;  the 
"  expense  bill "  system  ;  carrying  to  terminal  points 
at  commodity  rates  an  article  which,  if  the  class 
rate  were  imposed,  would  still  seek  rail  rather  than 
water  transportation ;  and  that  large  class  involv- 
ing rebates  in  their  various  forms,  excessive 
charges,  etc. 

Certain  things  have  been  projiounced  by  the 
Commission  as  not  constituting  unjust  discrimina- 
tion :  the  sale  of  two  tickets  for  passage,  one  of 
which  the  company  permits  to  be  transferred  and 
the  other  not,  when  the  two  do  not  appear  to  be 
similar ; l  a  contract  by  a  railway  company  for 
through  shipments  with  one  of  several  competing 
steamship  companies ; 2  a  low  rate  for  returning 
oil-tank  cars,3  filled  with  cotton-seed  oil  and  turpen- 
tine ;  absorbing  a  terminal  charge  on  live  stock  in 
one  market  and  exacting  such  a  charge  for  termi- 
nal service  in  another  city  which  is  reached  by  a 
different  line ; 4  charging  equal  rates  on  milk  for 
all  points  on  a  milk-train  line  ;6  separation  of  white 
and  colored  passengers  paying  the  same  fare,  when 
accompanied  by  the  same  care  and  protection  ; 6 
making  rates  for  immigrants  as  a  class ; 7  and 
finally,  when  an  article  of  traffic  does  not  move  on 

11.144.  24.265.  85-!93-  4  7.5*3. 

5  2.  272.      In  the  important  case,  7.  92,  a  blanket  rate  on  milk 
from  certain  New  York  points  was  held  to  be  unjust;    also  stated 
differences  in  the  rates  on  milk  in  cans  and  in  bottles. 

6  3.  in;    i.  428.  7  2.  271. 

P  209 


RAILWAY   LEGISLATION 

account  of  burdensome  rates,  and  the  carrier  is 
hauling  a  considerable  number  of  empty  cars  in 
the  direction  such  article  would  naturally  move 
if  accorded  a  lower  rate,  the  carrier  may  be  justi- 
fied in  carrying  at  a  rate  that  will  induce  the  move- 
ment of  such  traffic,  provided  no  extra  or  additional 
charge  is  in  consequence  put  upon  other  articles 
carried.1 

The  hobbyist  who  urges  the  adoption  of  some 
one  of  the  dozen  or  more  principles  upon  which 
railway  rates  may  be  based,  with  the  confident  be- 
lief that  his  particular  scheme  would  forever  settle 
the  difficulties  of  railway  charges,  finds  little  en- 
couragement in  the  decisions  of  the  Commission. 
No  one  can  go  far  into  the  problem  of  rates  with- 
out feeling  very  strongly  the  utter  futility  of  at- 
tempts to  reduce  all  rates  to  the  basis  of  a  single 
principle.  In  this,  as  in  so  many  other  domains 
of  economic  life,  the  question  is  not  one  or  the 
other,  but  one  anct  the  other  or  others.  The  cir- 
cumstances and  conditions  under  which  goods  and 
persons  are  transported  are  far  too  complex  and 
too  involved  to  admit  of  so  simple  a  solution  for 
determining  rates.  The  Commission,  in  deciding 
concrete  cases  as  they  have  arisen,  has  fallen  back 
upon  various  principles  of  railway  rates,  giving  one 
or  the  other  a  higher  rank  as  the  peculiar  combina- 
tion of  facts  in  that  case  appeared  to  demand. 
Hence  the  decisions  contain  references  to  the  prin- 
ciples of  value,  distance,  cost,  space,  weight,  etc. 
1  6.  61. 

210 


PRINCIPLES   OF   THE   DECISIONS 

In  one  of  its  earliest  decisions1  the  Commission 
enumerated  the  following  factors  to  be  taken  into 
consideration  in  the  determination  of  just  and  rea- 
sonable rates:  (i)  the  earnings  and  expenses  of 
operation ;  (2)  rates  charged  upon  the  same  com- 
modity on  other  roads  similarly  situated;  (3)  the 
diversities  between  the  railway  in  question  and 
such  other  roads ;  (4)  the  relative  amount  of 
through  and  local  business ;  (5)  the  proportion 
borne  by  the  commodity  in  question  to  the  re- 
mainder of  the  local  traffic ;  (6)  the  market  value 
of  the  commodity ;  (7)  the  reductions  made  by  the 
carrier  upon  other  articles  which  are  consumed  and 
necessarily  required  by  the  producers  of  the  article 
in  question ;  (8)  all  other  circumstances  affecting 
the  traffic  of  itself  and  as  related  to  other  consid- 
erations entering  into  the  charges  of  the  carrier.  ^ 

Rates  may  be  established  on  a  mileage  basis  2  and 
the  rate  per  ton-mile  grow  less  in  proportion  to 
distance,3  but  a  departure  from  equal  mileage  rates 
on  different  branches  or  divisions  of  the  same  rail- 
way must  be  clearly  shown  to  be  necessary  before 
it  can  be  approved.4  Through  rates 6  are  not  re- 
quired to  be  made  on  a  mileage  basis,  nor  local 
rates  to  correspond  with  divisions  of  a  joint 
through  rate  over  the  same  line.  Mileage  is 
usually  an  element  of  importance,  and  due  regard 
to  distance  proportions  should  be  observed  in  con- 
nection with  the  other  considerations  that  are 
material  in  fixing  transportation  charges.  The 

1 1.  325.        2 1.  629.        8  2.  52.       4  5.  612.       6  3.  252. 

211 


RAILWAY    LEGISLATION 

distance  being  in  favor  of  one  of  two  competing 
points,  and  neither  cost,  the  value  of  the  service, 
nor  other  conditions  of  transportation  in  favor  of 
the  other,  the  shorter  distance  point  cannot  justly 
be  denied  at  least  equal  rates  with  the  longer.1 
The  market  value  of  a  commodity,  the  value  of  the 
transportation  service  to  the  commodity,  its  cost 
of  production,  and  the  actual  cost  of  carriage  are 
elements  of  importance  in  establishing  rates.2 
Value  is  another  important  element,  but  it  cannot 
be  made  an  arbitrary  standard  independent  of  all 
other  considerations.3  Rates  should  bear  a  fair 
and  reasonable  relation  to  the  antecedent  cost  of 
the  traffic  as  delivered  to  the  carrier  and  to  the 
commercial  value  of  such  traffic ;  but  it  is  incum- 
bent on  parties  invoking  this  rule  to  make  satisfac- 
tory and  reliable  proof  as  to  such  antecedent  cost 
and  commercial  value,4  and  in  case  of  competitive 
articles6  over  the  same  line  the  relation  of  rates 
should  be  determined  by  reference  to  the  respec- 
tive costs  of  service  ascertained  with  reasonable 

1  6.  342. 

2  The  writer  refrains  from  discussing  in  this  place  the  meaning 
of  the  terms  "  value,"  "  cost,"  "  expense,"  etc.,  as  used  in  transpor- 
tation matters.     A  variety  of  definitions  can  be  constructed  syntheti- 
cally from  the  decisions.     The  writer  is  inclined  to  restrict  the  use 
of  the  term  "  value  of  service  "  to  value  of  service  to  the  commodity 
considered  as  an  object  of  purchase  and  sale  on  a  competitive  mar- 
ket;  and  "cost  of  transportation"  to  material  sacrifices  made  by  a 
railway  in  carrying  a  particular  article  at  a  certain  time  (which,  as 
is  well  known,  cannot  be  accurately  determined  for  a  particular 
service). 

8  8.  158.  4  5.  529.  64.  611. 

212 


PRINCIPLES   OF   THE   DECISIONS 

accuracy.  Although  rates  should  bear  a  reason- 
able relation  to  cost  of  production  and  to  the  value 
of  the  service  to  the  producer  and  shipper,  they 
should  never  be  so  low  as  to  impose  a  burden  on 
other  traffic ; l  nor  can  small  earnings,2  extraordi- 
nary or  unnecessary  cost  of  operation  or  manage- 
ment,3 or  other  financial  necessities4  and  conditions 
of  the  carrier  justify  excessive  rates.  The  degree 
of  risk  to  the  carrier 6  and  the  capitalization  of  a 
railroad 6  have  a  bearing  upon  rates.  The  latter, 
in  order  to  have  consideration,  should  be  accom- 
panied by  a  history  of  the  capital  account,  the 
value  of  the  stock  and  various  securities,  and  the 
actual  cost  and  value  of  the  property  itself.  To 
make  the  capital  account  of  railways  the  measure 
of  legitimate  earnings  would  place,  as  a  rule,  the 
corporation  which  has  been  honestly  managed 
from  the  outset  under  enormous  disadvantages. 

Classification.  —  That  rates  can  be  changed  by 
modifying  classifications  is  an  elementary  proposi- 
tion of  transportation.  That  principles  of  railway 
rates  constitute  the  decisive  factors  in  classifica- 
tion is  its  corollary.  A  study  of  classifications  is 
inseparable  from  a  study  of  rates,  and  vice  versa. 
The  great  classifications  in  force  in  the  United 
States  to-day  are  the  result  of  years  of  effort  in 
improving  some  original  schedules  and  in  consoli- 
dating and  eliminating  scores  of  others.  The 
three  dominating  classifications  of  to-day,  with 

M-  48.  87.92.  56.  131;   1.465. 

2 1.  375.  *  6.  601.  6  8.  158. 

213 


RAILWAY    LEGISLATION 

more  than  seven  thousand  specifications,  are  z 
great  advance  upon  the  schedule  of  1856  witt 
thirty-three  specifications.  This  development  ha< 
been  one  steady  march  toward  uniformity,  ir 
which  the  Interstate  Commerce  Commission  has 
always  stood  on  the  side  of  progress,  and  argu 
ments  in  favor  of  a  uniform  classification  have 
been  repeated  many  times  in  its  reports.  "  The 
Commission  has  repeatedly  said  that  the  re 
arrangement  of  rates  and  the  simplification  oi 
classifications  are  matters  which  the  carriers 
should  undertake  and  should  carry  forward  foi 
themselves."1  While  the  Commission  has  been 
reluctant  to  enter  upon  active  classification  mak 
ing,  its  decisions  are  not  without  direct  bearing 
.  upon  specific  questions  relating  to  classifications, 
especially  in  matters  of  principle.  Classification 
•is  deemed  convenient  and  essential  to  any  practi 
cal  system  of  rate-making,  and  is  so  recognized, 
though  not  enjoined,  by  the  act  to  regulate  com 
merce.2  And  when  a  classification  is  used  as  a 
device  to  effect  unjust  discriminations,  or  as  a 
means  of  violating  other  provisions  of  the  statute, 
the  act  requires  the  Commission  to  so  revise  and 
correct  such  classification  and  arrangement  as  tc 
correct  abuse.  A  manufacturer  of  soap  advertised 
and  sold  as  toilet  soap  made  complaint  against  a 
railway  company  for  classifying  his  soap  with  othei 
toilet  soaps,  and  not  with  the  lower  class  of  laun 
dry  soaps.  The  Commission  held  that  a  manu- 

1 3* 19.  2  4-  535- 

214 


PRINCIPLES   OF   THE   DECISIONS 

facturer's  description  of  an  article  designed  to 
induce  its  purchase  by  the  public  also  describes 
it  for  transportation,  and  carriers  may  accept  his 
description  for  purposes  of  classification  and  rates.1 
In  another  case2  the  Commission  held  that  two 
kinds  of  soap  advertised  as  alike,  and  substantially 
equal  in  value,  should  be  classified  alike  for  trans- 
portation purposes.  Products  classified  alike  are 
presumptively  entitled  to  equal  rates ; 3  in  classify] 
ing  them,  cost,4  bulk,  weight,  value,  and  their  gen- 
eral characteristics  should  be  chief  considerations;5 
clearness  and  simplicity  should  be  aimed  at  and 
irregularities  and  inconsistencies  eliminated ; 6  and 
a  classification  must  have  the  same  construction 
in  favor  of  all  persons.7  Unjust  discrimination 
against  a  commodity  is  not  shown  by  evidence 
of  a  lower  classification  for  articles  widely  dissimi- 
lar in  the  elements  of  risk,  weight,  bulk,  value,  or 
general  character.  The  proper  method  of  com- 
parison is  the  classification  accorded  by  the  car- 
riers to  similar  articles.8  Railway  officials  who 
have  made  a  classification  cannot  testify  to  their 
understanding  of  its  construction.  A  classifica- 
tion sheet  is  put  before  the  public  for  general 
information ;  it  is  supposed  to  be  expressed  in 
plain  terms,  so  that  the  ordinary  business  man  can 
understand  it,  and  in  connection  with  the  rate 
sheets  can  determine  for  himself  what  he  can  be 

1  4.  41;   similarly  in  4.  32.  *  6.  52.  7  2.  122. 

2  4- 733-  66.548.  85.638. 

8  3.  252.  6  2.  I. 

215 


RAILWAY    LEGISLATION 

lawfully  charged  for  transportation.  The  persons 
who  prepared  the  classification  have  no  more  au- 
thority to  construe  it  than  anybody  else,  and  they 
must  leave  it  to  speak  for  itself.1 

Through  Rates.  —  Through  rates  and  through 
billing  are  matters  of  agreement  among  carriers 
engaged  in  interstate  commerce.  The  Commission 
has  no  power  to  compel  them  against  their  consent 
to  enter  into  arrangements  for  through  rates  and 
for  through  bills  of  lading,2  although  the  statute 
encourages  such  connections,3  because  they  furnish 
cheapened  rates  and  greater  facilities  to  the  public, 
while  at  the  same  time  they  give  increased  employ- 
ment and  earnings  to  a  larger  number  of  carriers.4 
Railway  companies  may  make  whatever  rates,  form 
whatever  lines,  and  establish  whatever  differentials 
they  deem  best  for  the  purpose  of  securing  and 
conducting  transportation,  provided  the  just  inter- 
ests of  the  public  are  not  sacrificed  thereby ;  and 
whether  in  so  doing  they  deal  with  each  other 
wisely  or  unwisely,  fairly  or  unfairly,  is  not  a  mat- 
ter for  the  Commission  to  decide.5  A  through  bill 
of  lading  is  evidence  of  a  through  rate.6  It  is  not 
necessary  that  it  should  be  formally  "  quoted  "  by 
one  of  the  carriers  to  another  who  is  engaged  in 
the  making  of  it  to  constitute  it  a  through  rate. 
Names  are  nothing  in  such  a  transaction ;  the  law 
looks  at  the  elements  and  substance  of  the  trans- 
action itself.  The  fact  that  the  initial  or  an  inter- 

1 2. 122.  8  4-  535-  6  7- 6l2- 

2  4.  265;  6.  647;  7.  376.  *  4.  535.  6  2. 131. 

216 


PRINCIPLES   OF  THE   DECISIONS 

mediate  carrier  charges  the  full  local  rate  does  not 
destroy  the  through  nature  of  the  shipment,1  nor 
is  a  through  rate  illegal  which,  when  divided  be- 
tween carriers,  gives  them  less  than  their  local 
rate,  provided  that  the  through  rate  itself  is  not 
less  than  some  one  of  the  local  rates,  or  unjustly 
discriminating  against  individuals  or  localities,  or 
so  low  as  to  burden  other  business  with  part  of  the 
cost  of  the  business  upon  which  it  is  imposed.2 
Reasons  may  exist  for  making  through  rates  kss 
than  the  sum  of  the  local  rates,3  and  traffic  condi- 
tions may  warrant  carriers  in  exacting  a  share  in 
through  rates  which  gives  them  more  per  mile 
than  that  which  results  to  a  connecting  carrier 
from  the  division  accepted  by  it ; 4  but  in  such 
cases  carriers  must  give  proof  of  the  circum- 
stances which  justify  the  disproportionate  division 
of  a  through  rate.5  Although  a  shipper  or  con- , 
signee  has  no  direct  interest  in  the  way  a  joint 
rate  is  divided  between  carriers,  nor  in  the  amount  - 
of  the  division  received  by  each  carrier,  he  is  en- 
titled, nevertheless,  to  inquire  into  such  division 
when  he  complains  that  the  joint  rate  is  unlawful ; 
for  the  amount  received  by  the  different  carriers 
may  be  significant  upon  the  reasonableness  of  the 
aggregate  charge ;  and  when  an  unlawful  rate  re- 
sults from  some  arbitrary  division  exacted  by  one 
of  the  carriers,  the  Commission  will  find  the  facts 
and  state  its  conclusions  with  respect  to  such  share 

1  2.  131;  6.  I.  *  3.  450.  5  6.  i. 

2  2.  584;    4.  744.  *  8.  277. 

217 


RAILWAY    LEGISLATION 

or  division.1  Such  complaints,  even  though  brought 
in  the  name  of  an  individual,  may  challenge  the 
entire  schedule  of  rates  to  competing  towns,  and 
such  cases,  as  distinguished  from  those  involving 
individual  grievances  only,  are  peculiarly  public  in 
their  nature,  since  they  embrace  in  one  proceed- 
ing the  various  business  and  industrial  interests  in 
cities  and  towns,  as  those  interests  may  be  affected 
by  the  charges  of  public  carriers  whose  facilities 
are  employed  in  the  interchange  of  commerce.2 
The  Commission  inquires  primarily  into  the  in- 
fluence of  a  through  rate  taken  as  an  entity. 
How  the  rate  is  made3  is  only  material  as  bear- 
ing upon  the  legality  of  the  aggregate  charge,  and 
how  any  reduction  may  be  accomplished  is  a  mat- 
ter for  the  carriers  to  determine  among  them- 
selves.4 The  tariff  of  rates  should  also  show 
which  carriers  united  in  establishing  the  joint 
rates.5  In  the  division  of  joint  rates6  each  car- 
rier may  receive  less  than  its  established  local 
rate ;  one  may  receive  more  and  another  less  than 
full  local  rates  ;  but  whatever  the  basis  of  division, 
the  essential  feature  of  such  rates  is  that  the  con- 
necting carriers  have  agreed  or  mutually  consented 
to  carry  traffic  over  the  connecting  line  for  a  less 
aggregate  charge  than  the  sum  of  their  established 
local  rates.  So-called  through  export  rates,  i.e. 
rates  by  rail  plus  rates  by  water,  are  not  analogous 
to  joint  rates  made  by  joint  arrangements,  and  an 

1  8.  598;  5. 13;  2.  131.  s  2t  553.  &  5>  44. 

2  6. 458;  5-  97-  *  5-  324-  6  7-  323- 

218 


PRINCIPLES   OF   THE   DECISIONS 

" export  rate"  may  be  lower  than  the  rate  on  the 
same  commodity  from  the  same  origin  and  bound 

(for  the  same  port  but  not  for  export,  because  it  is 
in  essence  the  division  of  a  through  rate.1 

Not  to  be  confused  with  through  rates  are  com- 
bination rates,  obtained  by  adding  to  the  through 
rate  to  a  certain  point  the  local  rate  from  that  point 
back  to  the  point  of  destination.  This  system  pre- 
vails most  widely  in  southern  territory  and  is  con- 
nected with  the  trade-centre  theory.  Combination 
rates  generally  bring  disadvantages  to  the  towns 
to  which  they  apply  and  advantages  to  basing 
points ; 2  and  when  combination  rates  produce  a 
lower  rate  than  the  tariff  calls  for,  they  enable  the 
knowing  shipper  to  obtain  advantages  over  the  one 
who  has  less  information.3 

Differential  rates  have  been  treated  by  the  Com- 
mission chiefly  in  connection  with  export  rates  to 
competing  seaports  and  longer  routes  competing 
for  traffic  to  a  common  centre.  The  export-rate 
cases  will  be  discussed  in  a  later  paragraph ;  suf- 
fice it  here  to  call  attention  to  the  grounds  upon 
which  the  Commission  justified  a  differential  ex-  j 
port  rate  to  Boston,  via  New  York,  as  low  as 
the  rate  to  New  York.  These  grounds  were:  (i) 
the  greater  cost  of  transportation  to  Boston ;  (2)  the 
greater  volume  of  business  to  and  from  New  York  ; 

(3)  the  competition  of  the  Lake,  Erie  Canal,  and 
Hudson  River  route,  as  well  as  of  the  railways ; 

(4)  the  geographical  and  commercial  advantages  of 

1  8.  214.  *  8.  277.  » 2.  i. 

219 


RAILWAY    LEGISLATION 

New  York.1  However,  it  should  also  be  observed 
that  the  Commission  has  held  it  neither  sound  in 
principle  nor  equitable  in  practice  for  railway  lines 
to  create  artificial  differences  in  market  conditions 
by  an  arbitrary  differential  in  rates,  whereby  the 
product  of  one  section  of  the  country  is  assigned 
to  one  market  and  the  product  of  another  section 
of  the  country  to  another  market.2 

Pooling.  —  Section  V  of  the  act  prohibits  pool- 
ing. What  constitutes  pooling  within  the  mean- 
ing of  the  statute  has  been  decided  by  the  courts, 
and  will  be  further  considered  in  the  next  chapter. 
Reference  is  here  made  to  rulings  of  the  Commis- 
sion on  contracts  and  agreements  among  railway 
companies  other  than  illegal  pooling  contracts. 
An  early  decision,3  confirmed  by  a  recent  one,4 
maintains  that  an  intra-state  railway  becomes  in- 
terstate when  it  voluntarily  enters  into  through 
shipment  arrangements;  but  shipments  from 
within  a  state  with  the  intention  of-  reshipment 
beyond  the  state  is  not  interstate  commerce.6  The 
receipt  successively  by  two  or  more  carriers  for 
transportation  of  traffic  shipped  under  through 
bills  for  continuous  carriage  or  shipment,  and 
previous  formal  arrangement  between  them,  is  not 
necessary  to  bring  such  transportation  under  the 

1 1.  24, 436. 

2  8.  185;  see  also  5.  571;  7.481;   7.612;  8.47. 

8  i-  3*5- 

*  8.  531;   see  also  167  U.  S.  642,  and  162  U.  S.  184. 

6  i.  30. 

220 


PRINCIPLES   OF  THE   DECISIONS 

terms  of  the  law;1  and  the  successive  receipt 
and  forwarding  in  ordinary  course  of  business  by 
two  or  more  carriers  of  the  interstate  traffic  shipped 
under  through  bills  for  continuous  carriage  over 
their  line  is  assent  to  a  "common  arrangement.'*2 
A  railway  is  obliged  to  transport  freight  when 
the  same  is  offered  in  the  usual  way,  without  any 
special  agreement.3  Agreements  among  railway 
companies  supplying  a  common  market  from 
competitive  productive  areas,  which  bring  advan- 
tages to  one  such  area,  but  disadvantages  to  the 
other,  are  violations  of  the  act.4 

Referring  to  the  question  of  jurisdiction,  it 
should  be  observed  that  the  Commission  has  in- 
cluded in  the  "instrumentalities  of  shipment  or 
carriage,"  subject  to  the  act,  a  small  road  wholly 
within  a  state,  but  used  for  interstate  traffic;5 
likewise  commerce  between  points  in  the  same 
state,  but  passing  through  another  state ; 6  an 
electric  railway  between  the  District  of  Columbia 
and  the  state  of  Maryland  ; 7  a  bridge  extending 
across  a  stream  from  one  state  into  another;8  live 
stock  carried  through  different  states  to  stock  yards 
in  a  centre  of  this  business  is  interstate  com- 
merce until  delivery  is  made  at  such  yards ; 9  a 
foreign  carrier ; 10  and  foreign  merchandise  carried 
on  a  through  bill  of  lading.11  Among  the  matters 
held  not  subject  to  its  jurisdiction  the  Commission 

1 5.  324;  6.  i.         *  6. 195.          7  7-  83.  10  3-  89. 

2  6.  i.  6  i.  495.  8  2.  162.  n  4.  109. 

'I-594-  6i-495-  97-  S13- 

221 


RAILWAY    LEGISLATION 

has  mentioned  the  following :  a  steamboat  plying 
between  two  ports  in  the  same  state,  but  engaged 
in  interstate  traffic  ; l  fruit  destined  to  New  York, 
but  shipped  only  to  Jersey  City  from  points  in 
New  Jersey;2  compelling  railways  to  allow  extra 
baggage  to  commercial  travellers ; 3  or  to  provide 
a  particular  kind  of  cars  or  other  special  equip- 
ment;4 to  award  counsel  fees;6  to  render  judg- 
ments and  enter  decrees.6  The  jurisdiction  of 
the  Commission  in  matters  relating  to  orders  on 
rates  will  be  discussed  in  connection  with  court 
decisions. 

What  has  been  presented  thus  far  may  be  con- 
sidered a  code  for  the  administration  of  railways 
prescribed  by  the  Interstate  Commerce  Commis- 
sion.7 This  code  is  based  upon  the  formal  deci- 
sions of  the  Commission.  Its  informal  work  ap- 
pears at  times  to  overshadow  that  which  is  formal ; 
and  in  an  estimate  of  the  services  of  the  Commis- 
sion informal  hearings  and  mediations  should  re- 
ceive a  high  place.  Indeed,  there  are  persons 
who  rate  the  mediatory  work  of  the  Commission 

1  4.  265.  8  I.  122.  b  I.  339. 

2  2.  142.  4  5.  193.  6  5.  166. 

7  "This,  then,  is  the  significant  fact  in  the  life  of  the  Commis- 
sion :  that  out  of  the  opinions  expressed  upon  cases  there  has  begun 
to  develop  a  system  of  authoritative  rules  and  established  interpre- 
tations, which,  sooner  or  later,  will  come  to  be  recognized  as  a  body 
of  administrative  law  for  inland  transportation."  —  H.  C.  Adams, 
"A  Decade  of  Federal  Railway  Regulation,"  Atlantic  Monthly  >  81. 
433-443- 

222 


PRINCIPLES  OF  THE   DECISIONS 

higher  than  the  performance  of  its  formal  func- 
tions. On  the  whole,  "the  Interstate  Commerce 
Commission  has  done  a  great  work ;  no  commis- 
sion or  court  in  this  country  has  ever  done  a 
greater  work  in  the  same  length  of  time."  1 

1  Senator  Cullom,  in  The  Railway  Age  (April  14,  1893). 


223 


CHAPTER   III 

THE  SUPREME  COURT  AND  THE  INTERSTATE 
COMMERCE  COMMISSION 

MANY  of  the  principles  promulgated  in  the  de- 
cisions of  the  Commission  have  been  radically  mod- 
ified or  overruled  by  the  Supreme  Court  of  the 
United  States.  For  the  purposes  of  this  discus- 
sion only  four  groups  of  decisions  will  have  to  be 
considered:  first,  court  decisions  affecting  the 
interpretation  of  the  long  and  short  haul  clause ; 
or,  more  definitely,  what  are  the  factors  to  be  in- 
cluded in  "  circumstances  and  conditions "  affect- 
ing long  and  short  hauls.  Second,  the  limitations 
placed  by  the  court  on  the  Commission's  power 
over  railway  rates.  Third,  the  power  of  the  Com- 
mission in  securing  testimony.  And  fourth,  de- 
cisions relating  to  agreements  and  contracts 
among  competing  railway  companies.  The  treat- 
ment by  the  courts  of  the  findings  of  fact  before 
the  Commission  should,  perhaps,  also  be  commented 
upon  in  this  connection,  but  that  question  can  be 
considered  equally  well  in  the  closing  part  of  this 
paper. 

The  Interpretation  of  the  Long  and  Short  Haul 
Clause.  —  On  March  23,  1889,  the  Commission 

224 


COMMISSION    AND   COURTS 

made  an  order  which,  among  other  things,  pro- 
vided as  follows  :  "  Imported  traffic  transported  to 
any  place  in  the  United  States  from  a  port  of 
entry  or  place  of  reception,  whether  in  this  coun- 
try or  in  an  adjacent  foreign  country,  is  required 
to  be  taken  on  the  inland  tariff  governing  other 
freights."  Thirteen  roads  alleged  conformity  to 
the  order  of  the  Commission,  three  complied  with 
the  same  within  three  months,  and  eight  continued 
to  charge  less  on  imports  than  on  the  carriage  of 
domestic  traffic.  Business  organizations  of  New 
York,  Philadelphia,  and  San  Francisco  brought 
action  against  the  railways  violating  the  order  of 
the  Commission  with  respect  to  the  relative  rates 
on  imports  and  domestic  freight,  and  on  January 
29,  1891,  the  Commission  handed  down  the  deci- 
sion1 known  as  the  Import  Rate  decision  —  one  of 
the  most  important  decisions  in  the  history  of  the 
federal  regulation  of  railways. 

Ample  evidence  was  introduced  by  the  com- 
plainants showing  that  certain  carriers  were 
charging  less  on  imported  goods  than  on  domestic 
goods  or  on  freight  originating  at  seaboard  points 
and  shipped,  perhaps,  on  the  same  train  with  goods 
of  foreign  origin  to  interior  or  other  seaboard 
points.  "  Not  only  was  there  a  lower  rate  for  the 
inland  carriage  of  foreign  traffic,  but  in  numerous 
cases  the  total  charge  from  the  foreign  place  of 
origin  through  our  seaports  to  destination  in  the 
interior  of  the  United  States  was  much  less  than 

1 4.  448. 
Q  225 


RAILWAY    LEGISLATION 

the  rail  charge  alone  on  domestic  goods  of  like 
description  from  the  same  seaports  to  the  same 
destination.'1 1  On  certain  classes  of  domestic 
goods  the  freight  rates  from  New  Orleans  to 
San  Francisco  were  more  than  three  times  the 
through  rates  from  Liverpool  to  San  Francisco  on 
similar  goods.  The  defendant  carriers  justified 
their  action  on  the  ground  that  the  imported  goods 
were  carried  under  circumstances  and  conditions 
substantially  dissimilar  from  those  under  which 
domestic  goods  were  carried,  because  of  the  com- 
petition of  ocean  lines  and  ocean  and  rail  lines. 
They  also  maintained  that  the  rate  on  foreign 
goods  from  the  seaboard  to  interior  towns  was  a 
part  of  the  through  rate  from  the  foreign  point  of 
origin,  and  that  this  part  of  the  through  rate  could, 
under  the  law,  be  less  than  the  local  rate  over  the 
same  line  for  the  same  distance.  But  the  Com- 
mission denied  the  right  of  the  railways  to  dis- 
criminate between  domestic  and  foreign  goods,  and 
furthermore  maintained  the  opinion  that  extrater- 
ritorial influences,  such  as  the  competition  of  ocean 
lines  or  circumstances  affecting  the  movement  of 
foreign  commerce  before  reaching  our  own  country, 
did  not  constitute  a  dissimilarity  of  circumstances 
and  conditions  within  the  meaning  of  the  act  to 
regulate  commerce,  and  insisted  on  obedience  to 
the  order  of  March  23,  1889.  Some  of  the  carriers 
refusing  to  obey,  a  petition  was  filed  against  one  of 
them  for  the  enforcement  of  the  order  by  a  United 
1  Annual  Report,  I.  C.  C.  (1896),  p.  8. 
226 


COMMISSION   AND 


States  Circuit  Court  from  which  an  appeal  was 
taken  to  the  Circuit  Court  of  Appeals,  and  finally 
to  the  Supreme  Court  of  the  United  States. 

The  two  lower  courts  upheld  the  decision  of  the 
Commission,  but  the  Supreme  Court  refused  to  accept 
the  interpretation  of  the  lawas  construed  by  the  Com- 
mission and  lower  courts,  and  held  l  that  "among  the 
circumstances  and  conditions  to  be  considered  as 
well  in  the  case  of  traffic  originating  in  foreign  ports 
as  in  the  case  of  traffic  originating  within  the  limits 
of  the  United  States,  competition  that  affects  rates 
should  be  considered."  In  other  words,  extrater- 
ritorial influences,  as  well  as  competitive  conditions 
arising  wholly  outside  of  the  field  occupied  by  the 
carrier,  may  be  considered  in  determining  similarity 
and  dissimilarity  of  circumstances  and  conditions  ; 
and  consequently  the  Commission  erred  in  not 
considering  all  the  circumstances  and  conditions 
entering  into  the  case. 

In  thus  widening  the  meaning  of  the  phrase 
"  circumstances  and  conditions,"  the  Supreme 
Court  entered  the  wedge  which  the  Troy  case  2 
drove  in  full  length  half  a  decade  later,  and  which 
reduces  the  long  and  short  haul  clause  of  the  act 
to  nullity,  so  that  no  tangible  meaning  can  be 
assigned  to  the  same  at  present.  Troy  is  a  city  in 
Alabama  reached  by  two  railways  and  situated  fifty- 
two  miles  from  Montgomery.  Montgomery  may 
be  reached  by  a  number  of  different  railways.  The 
rates  on  traffic  going  over  one  of  these  railways 
1  162  u.  s.  197.  2  168  Ua  s<  I44 

227 


RAILWAY    LEGISLATION 

through  Troy  to  Montgomery  were  higher  to  Troy 
than  to  Montgomery,  the  railway  in  question  justi- 
fying this  greater  charge  for  the  shorter  distance 
to  Troy  on  the  ground  that  the  competition  in  Mont- 
gomery made  the  circumstances  and  conditions 
under  which  traffic  was  conducted  in  Montgomery 
different  from  those  prevailing  in  Troy.  The  Com- 
mission ruled  that  the  competition  of  the  railways 
centring  in  Montgomery,  all  of  which  are  subject 
to  the  act  to  regulate  commerce,  did  not  justify 
any  one  or  all  of  them  in  violating  the  long  and 
short  haul  clause.  The  Commission  has  repeatedly 
held,  as  stated  in  Part  I  above,  that  not  one  or 
several,  but  all  the  circumstances  and  conditions 
must  be  drawn  into  consideration,  but  the  com- 
petition of  carriers  subject  to  the  act  had  been 
considered  outside  of  the  scope  of  this  principle.1 
/Not  so  with  the  Supreme  Court.  It  reaffirmed  the 
Import  Rate  decision,  and  held  that  railway  com- 

1  "  It  is  improbable  that  the  Commission  will  interpret  the  act  in 
the  sense  that  the  words  *  under  substantially  similar  circumstances 
and  conditions '  justify  all  existing  differential  rates  due  to  competi- 
tion. This  would  practically  emasculate  the  law.  .  .  .  The  act  is 
an  expression  of  a  correct  principle,  but  the  limitations  of  the  prin- 
ciple are  no  less  obvious."  —  Seligman,  "  Railway  Tariffs  and  the 
Interstate  Commerce  Law,"  Political  Science  Quarterly,  II,  263 
(June,  1887). 

With  remarkable  insight  Professor  Seligman  outlined  probable 
consequences  of  the  act  which  subsequent  experience  has  amply 
demonstrated.  Written  immediately  after  the  passage  of  the  act,  the 
analysis  of  railway  problems  presented  in  the  article  is  the  more 
striking  in  the  accuracy  with  which  the  generalizations  foreshadow 
the  events  which  future  years  were  to  bring  upon  us. 

228 


COMMISSION   AND  COURTS 

petition  can  create  discriminating  circumstances 
and  conditions,  and  that  therefore  the  higher  rate 
to  Troy  is  not  prohibited  by  the  long  and  short 
haul  section.1  "  Competition  is  one  of  the  most 
obvious  and  effective  circumstances  that  make  the 
conditions,  under  which  a  long  and  short  haul  is 
performed,  substantially  dissimilar,  and  as  such 
must  have  been  in  the  contemplation  of  Congress 
in  the  passage  of  the  act  to  regulate  com- 
merce." Competition  which  affects  rates  must  be 
considered  in  section  IV,  but  not  in  section  II. 
"  Under  substantially  similar  circumstances  and  con- 
ditions," as  used  in  the  second  section,  refers  to  the 
matter  of  carriage,  and  does  not  include  competi- 
tion between  rival  routes.  "  The  mere  fact  of  com- 
petition, no  matter  what  its  character  or  extent, 
does  not  necessarily  relieve  the  carrier  from  the 
restraints  of  the  third  and  forth  sections."  It 
should  be  noticed  that  in  a  different  case,2  arising 
under  section  II,  which  prohibits  discrimination 
among  persons,  the  Supreme  Court  held  that  the 
phrase,  "  under  substantially  similar  circumstances 
and  conditions,"  does  not  include  competition,  and 
that  this  phrase  "  may  have  a  broader  meaning  or  a 
wider  reach  in  section  IV  (long  and  short  haul)  than 
the  same  phrase  found  in  section  II." 

The  Import  Rate  and  Troy  cases,  by  extending 
the  "  reach  "  of  the  phrase  "  substantially  similar  ; 
circumstances  and  conditions  "  to  include  competi- 
tion among  railways  subject  to  the  act,  opened  the  j 
1  Sec.  IV.  2  167  U.  S.  512. 

229 


RAILWAY    LEGISLATION 

portals  wide  for  that  discrimination  among  places 
which  was  prohibited  under  section  IV. 

Power  of  the  Commission  over  Rates.  —  In  the 
Annual  Report  for  1897*  the  Commission  stated 
that  it  had  exercised  the  power  to  prescribe  reason- 
able and  just  rates  for  a  period  of  ten  years,  begin- 
ning with  an  order  made  in  the  second  month  after 
its  organization.  "  Of  the  135  formal  orders  made 
in  the  suits  actually  heard  from  its  institution  down 
to  the  present  time,  68  have  prescribed  a  change  in 
rate  for  the  future."2  "We  have  now  before  us 
38  cases  in  which  the  main  question  is  one  of 
reduction  of  the  freight  rate."3  This  represents 
the  practice  of  the  Commission  during  the  first  ten 
years  of  its  existence.  It  is  a  fact  of  common 
knowledge  that  the  notions  which  existed  in  Con- 
gress in  1887  on  the  subject  of  interstate  com- 
merce were  vague  and  imperfect,  and  that  this 
feature  in  the  situation  naturally  led  to  the  loose 
and  imperfect  character  of  the  act.  The  practice 
of  the  Commission  of  prescribing  rates,  under  cer- 
tain conditions,  was  fostered  by  the  necessity  of  the 
situations  which  had  to  be  met ;  and  the  reversal 
of  this  policy  by  decisions  of  the  Supreme  Court 
placed  the  administration  of  the  Interstate  Com- 
merce Act  on  an  entirely  different  basis. 

During  the  fifth  year  of  its  existence  the  Com- 
mission asserted 4  that  it  was  not  restricted  "  to 
finding  that  an  existing  rate  is  unreasonable  and 

1  Annual  Report  (1897),  p.  II.         8  Annual  Report  (1897),  P-  22> 

2  Annual  Report  (1897),  p.  16.         4  5.  97. 

230 


COMMISSION   AND   COURTS 

forbidding  its  continuance,  but  has  the  further 
authority  to  ascertain,  order,  and  enforce  a  rate  that 
is  reasonable.  The  power  to  determine  and  declare 
what  is  a  maximum  reasonable  rate  also  results 
from  those  provisions  of  the  act  which  require  the 
Commission  to  determine  what  reparation,  if  any, 
should  be  made  by  carriers  to  parties  injured  by 
their  violations  of  the  law,  and  in  cases  of  un- 
reasonable rates  the  measure  of  reparation  due  to 
such  a  party  is  the  difference  between  the  rate 
actually  charged  and  the  reasonable  rate  which 
should  have  been  charged."  This  was  reaffirmed 
in  a  subsequent  decision.1  But  the  Commission 
has  never  claimed  the  power  to  prescribe  a  rate 
in  the  first  instance.  "  Its  power  in  respect  to 
rates  is  to  determine  whether  those  which  the 
road  impose  are,  for  any  reason,  in  conflict  with 
the  statute."2  "We  sit  for  the  correction  of  what 
is  unreasonable  and  unjust  in  those  tariffs."8 

The  first  prominent  case  4  leading  to  the  present 
interpretation  of  the  law  arose  on  the  complaint  of 
a  Cincinnati  firm  against  a  railway  for  charging 
more  per  hundred  pounds  of  freight  to  Social  Circle 
than  to  Augusta,  119  miles  farther  on  the  same 
line ;  and,  secondly,  for  charging  rates  to  Social 
Circle  and  to  Atlanta,  which  were  in  themselves 
excessive  and  undue.  After  a  full  hearing  and  in- 
vestigation the  Commission,  among  other  things, 
issued  an  order  requiring  the  railway  company  to 
cease  and  desist  from  charging  more  than  a  certain 
1  5. 122.  2 1. 152.  8  7.  191.  *  4.  744. 

231 


RAILWAY    LEGISLATION 

amount  on  such  freight  from  Cincinnati  to  Atlanta. 
The  Circuit  Court,  to  which  an  appeal  was  taken, 
refused  to  enforce  this  order,  and  the  case  finally 
reached  the  Supreme  Court.1  Discussing  that 
part  of  the  case  which  relates  to  the  prescription 
of  rates,  the  court  said  :  "  We  do  not  find  any  pro- 
vision of  the  act  that  expressly,  or  by  necessary 
implication,  confers  such  a  power.  It  is  argued 
on  behalf  of  the  Commission  that  the  power  to  pass 
upon  the  reasonableness  of  existing  rates  implies 
a  right  to  prescribe  rates.  This  is  not  necessarily 
so.  The  reasonableness  of  the  rate,  in  a  given 
case,  depends  on  the  facts,  and  the  function  of  the 
Commission  is  to  consider  these  facts,  and  give 
them  proper  weight.  If  the  Commission,  instead  of 
withholding  judgment  in  such  a  matter  until  an 
issue  shall  be  made  and  the  facts  found,  itself  fixes 
a  rate,  that  rate  is  prejudged  by  the  commission 
to  be  reasonable."  2 

The  Commission  construed  this,  as  well  as 
analogous  opinions  of  the  court  in  the  Import  Rate 
decision,3  as  implying  that  "  If  the  Commission 
does  withhold  its  judgment  until  issue  shall  be 
made  and  the  facts  found,  and  then  requires  a 
carrier  not  to  exceed  charges  indicated  by  the 
evidence  to  be  reasonable  and  just,  such  action  is 
authorized  by  the  act."4  Acting  upon  this  as- 
sumption, the  Commission  undertook  to  prescribe 
maximum  rates,  and  was  again  overruled  by  the 

1  162  u.  S.  184.  8 162  u.  S.  197. 

2  p.  196.  *  Annual  Report  (1896),  p.  22. 

232 


COMMISSION   AND   COURTS 

Supreme  Court,1  which  held  that  neither  the  court 
nor  the  Commission  can  "  undertake  to  name  a 
maximum  rate  in  advance  and  enjoin  a  carrier  from 
violating  it."  The  power  of  the  Commission  over 
rates,  said  the  court,  is  confined  to  inquiries  as  to 
railway  management,  the  prevention  of  violations 
of  the  long  and  short  haul  clause,  of  discriminations 
and  of  undue  preferences,  and  the  securing  to  all 
shippers  of  "  that  equality  of  right  which  is  the 
great  purpose  of  the  Interstate  Commerce  Act." 
In  a  case  involving  the  relation  of  rates  on  the 
same  class  of  goods  from  a  Colorado  point  to  San 
Francisco  and  from  Chicago  to  San  Francisco,  the 
Commission  issued  an  order  fixing  a  maximum  rate 
from  the  Colorado  point  to  San  Francisco,  and 
specified  that  the  same  should  not  exceed  a  certain 
percentage  of  the  rate  from  Chicago.  This  order 
was  obeyed  for  about  two  years,  when  it  was  vio- 
lated by  one  of  the  roads.  The  case,  coming 
before  the  Circuit  Court  of  Appeals,  was  decided 
adversely  to  the  Commission,  in  harmony  with  the 
other  court  decisions  cited  above.  This  was  in 
April,  1900,  and  since  that  time  nothing  has  trans- 
pired which  would  warrant  the  assumption  that  the 
Commission  has  power  to  establish  rates  for  the? 
future.  All  that  this  body  can  do  at  present  is 
to  pass  upon  a  rate  actually  in  force,  pronounce  the 
same  reasonable  or  unreasonable  and,  if  the  latter, 
investigate  the  rate  after  it  has  been  modified  by 
the  carrier,  voluntarily  or  under  compulsion  of  the 
1 167  u.  S.  479. 
233 


RAILWAY    LEGISLATION 

courts,  even  by  a  fraction  of  a  cent,  and  then  con- 
tinue this  see-saw  process  until  a  reasonable  rate  has 
been  evolved.  Paraphrasing  the  words  of  a  critic 
of  the  old  Articles  of  Confederation,  the  Commission 
can  "recommend  everything  and  do  nothing.'* 

The  Power  of  the  Commission  to  secure  Evidence. 
—  Section  XII  of  the  act  to  regulate  commerce, 
both  in  its  original  form  and  as  subsequently 
amended,  gives  the  Commission  power  to  require 
the  attendance  of  witnesses  and  the  production  of 
books  and  papers,  refusal  being  punishable  by  the 
courts.  The  amended  form  of  1889  repeated  the 
original  wording  of  the  concluding  sentence  of  sec- 
tion XII,  as  follows,  "The  claim  that  any  such 
testimony  or  evidence  may  tend  to  criminate  the 
person  giving  such  evidence,  shall  not  excuse  such 
witness  from  testifying ;  but  such  evidence  or  tes- 
timony shall  not  be  used  against  such  person  on  the 
trial  of  any  criminal  proceeding/*  The  amend- 
ment of  1893  was  more  explicit  in  respect  to  com- 
pulsory testimony  and  the  penal  consequences  of  the 
failure  to  comply  with  the  summons  of  the  Com- 
mission, and  sought  to  protect  the  witness  in  the 
following  language  :  "  But  no  person  shall  be  pros- 
ecuted or  subjected  to  any  penalty  or  forfeiture 
for  or  on  account  of  any  transaction,  matter,  or 
thing  concerning  which  he  may  testify  or  produce 
evidence,  documentary  or  otherwise,  before  said 
Commission,  or  in  obedience  to  its  subpoena,  or  the 
subpoena  of  either  of  them,  or  in  any  such  case  or 
proceeding;  Provided,  That  no  person  so  testi- 

234 


COMMISSION   AND   COURTS 

fying  shall  be  exempt  from  prosecution  and  pun- 
ishment for  perjury  committed  in  so  testifying/' 
These  provisions  indicate  the  statutory  law  in  the 
matter  in  so  far  as  it  is  found  in  the  act  to  regu- 
late commerce.  Section  860  of  the  Revised  Stat- 
utes of  the  United  States,  which  had  been  in  force 
for  a  quarter  of  a  century,  and  which  provides  that 
witnesses  shall  not  be  excused  from  testifying  be- 
cause their  testimony  may  tend  to  criminate  them, 
and  that  such  testimony  shall  not  be  used  against 
persons  so  testifying  in  any  criminal  proceedings, 
was  incorporated,  in  substance,  in  the  original  law, 
as  well  as  in  the  amendment  of  1889.  The  amend- 
ment of  1893  was  intended  to  meet  the  decision  of 
the  Supreme  Court  in  the  Counselman  case,1  de- 
claring section  860  of  the  Revised  Statutes  uncon- 
stitutional, because  it  did  not  assure  that  absolute 
immunity  against  future  prosecutions  that  is  guar- 
anteed by  the  Fifth  Amendment  of  the  Constitu- 
tion of  the  United  States.  Counselman  had  refused 
to  obey  the  summons  to  testify  before  a  grand 
jury  ;  and,  being  held  for  contempt  of  court,  he 
appealed  to  the  Supreme  Court  of  the  United 
States,  with  the  result  indicated  above.  A  year 
later  the  amendment  of  1893  was  passed;  but  it  re- 
quired three  years  more  to  make  it  effective,  so 
that  the  Commission  existed  for  over  six  years 
without  that  power  which  would  make  it  practi- 
cable to  obtain  testimony  on  which  to  enforce  the 
penal  provisions  of  the  act. 

i  142  U.  S.  547. 

235 


RAILWAY   LEGISLATION 

The  steps  by  which  the  power  was  finally  secured 
may  be  briefly  outlined  by  reference  to  the  James, 
the  Brimson,1  and  the  Brown  cases.  The  James 
case  is  of  minor  consequence  because  no  appeal 
could  be  taken  to  the  Supreme  Court ;  as  decided 
by  the  Circuit  Court,  it  was  unfavorable  to  the 
amendment  of  1893,  as  not  affording  the  immu- 
nity guaranteed  by  the  Constitution  of  the  United 
States.  The  court  held  that  while,  under  the 
amendment  a  witness  might  be  freed  from  the 
legal  consequences  of  his  testimony,  the  govern- 
ment could  not  by  any  enactment  save  him  from 
the  disgrace  and  taint  upon  his  character  which  a 
disclosure  of  his  connection  with  crime  might 
entail.  The  Brimson  case  originated  in  the  same 
court.  The  Commission  applied  for  an  order  to 
compel  one  Brimson  to  answer  questions  pro- 
pounded to  him  by  the  Commission  and  to  pro- 
duce books,  but  the  application  was  refused  on  the 
ground  that  that  part  of  section  XII  of  the  Inter- 
state Commerce  Act  authorizing  or  requiring  courts 
to  use  their  power  in  securing  compulsory  testi- 
mony before  the  Commission  was  unconstitutional. 
This  was  nearly  a  year  before  the  passing  of  the 
amendment  of  1893,  so  that  the  decision  of  the 
Supreme  Court,  on  an  appeal  by  the  Commission, 
related  in  part  at  least  to  the  law  as  amended  in 
1889.  Nevertheless,  the  Supreme  Court  held2 
that  "the  twelfth  section  of  the  Interstate  Com- 

1  154  U.  S.  447;   155  U.  S.  3  (dissenting  opinion). 

2  I54U.  8.447. 

236 


COMMISSION   AND   COURTS 

merce  Act,  authorizing  the  circuit  courts  of  the 
United  States  to  use  their  process  in  aid  of  in- 
quiries before  the  Commission  established  by  that 
act,  is  not  in  conflict  with  the  Constitution  of  the 
United  States."  This  decision  alone  was  proba- 
bly sufficient  to  enable  the  Commission  to  secure 
the  necessary  evidence,  but  the  Brown  case1  cov- 
ered all  the  essential  features  of  the  Counselman, 
James,  and  Brimson  cases  combined,  and  effectu- 
ally removed  the  last  difficulties  in  the  way  of 
securing  for  the  Commission  the  testimony  of  re- 
calcitrant witnesses.  Brown  was  a  railway  official 
who  refused  to  answer  the  questions  put  to  him 
by  the  Commission,  on  the  ground  that  such  testi- 
mony might  incriminate  himself.  On  this  point 
the  Supreme  Court  said  that  the  clause  upon 
which  Brown  relied  should  be  construed  "to 
effect  a  practical  and  beneficent  purpose  —  not 
necessarily  to  protect  witnesses  against  every  pos- 
sible detriment  which  might  happen  to  them  from 
their  testimony  "  ;  and,  commenting  upon  the  pos- 
sible disgrace  which  might  come  to  a  witness  who 
discloses  criminal  acts,  the  court  further  said  : 
"  The  fact  that  the  testimony  may  tend  to  degrade 
the  witness  in  public  estimation  does  not  exempt 
him  from  the  duty  of  disclosure.  A  person  who 
commits  a  criminal  act  is  bound  to  contemplate 
the  consequences  of  exposure  to  his  good  name 
and  reputation,  and  ought  not  to  call  upon  the 
courts  to  protect  that  which  he  has  himself 
1 161  u.  S.  591. 
237 


RAILWAY    LEGISLATION 

esteemed  to  be  of  such  little  value.  The  safety 
and  welfare  of  an  entire  community  should  not  be 
put  into  the  scale  against  the  reputation  of  a  self- 
confessed  criminal.  .  .  .  The  design  of  the  con- 
stitutional privilege  is  not  to  aid  the  witness  in 
vindicating  his  character,  but  to  protect  him 
against  being  compelled  to  furnish  evidence  to 
convict  him  of  a  criminal  charge."  Since  this 
decision,  in  1896,  the  power  of  the  Commission  to 
secure  testimony  may  be  regarded  as  full  and  ade- 
quate ;  but  in  all  seriousness  the  query  must  be 
added :  What  is  there  to  prevent  an  unscrupulous 
railway  official  from  violating  the  Interstate  Com- 
merce Law  in  the  most  flagrant  manner,  and  then 
testifying  with  the  view  of  securing  personal  ex- 
emption from  the  penal  provisions  of  the  act  ? 

Indirectly  connected  with  the  subject-matter  of 
the  preceding  paragraph  stands  the  question  of  the 
weight  given  by  the  courts  to  the  findings  of  fact 
by  the  Commission.  Section  XIV  of  the  act  pro- 
vides that  the  findings  of  the  Commission  shall  be 
deemed  prima  facie  evidence  in  all  judicial  pro- 
ceedings as  to  each  and  every  fact  found ;  yet  it  is 
well  known  that  when  cases  reach  the  courts  new 
testimony  may  be  admitted  and  the  entire  case 
perhaps  be  tried  de  novo}  so  that  the  case  before 
the  courts  is  entirely  different  from  that  before 
the  Commission.  In  the  Import  Rate  case2  the 
Supreme  Court  incidentally  touched  upon  the 
treatment  of  cases  brought  in  the  courts  to  en- 

1  37  Fed.  Rep.  567;  94  Fed.  Rep.  272.  2  162  U.  S.  197. 

238 


COMMISSION   AND   COURTS 

force  the  orders  of  the  Commission  as  follows : 
"  The  questions  whether  certain  charges  were  rea- 
sonable or  otherwise,  whether  certain  discrimina- 
tions were  due  or  undue,  were  questions  of  fact, 
to  be  passed  upon  by  the  Commission  in  the  light 
of  all  facts  duly  alleged  and  supported  by  com- 
petent evidence,  and  it  did  not  comport  with  the 
true  scheme  of  the  statute  that  the  Circuit  Court  of 
appeals  should  undertake,  of  its  own  motion,  to 
find  and  pass  upon  such  questions  of  fact  in  a  case 
in  the  position  in  which  the  present  one  was  .  .  . ; 
yet,  as  the  act  provides  that,  on  such  hearing,  the 
findings  of  fact  in  the  report  of  said  Commission 
shall  \ytprimafdcu  evidence  of  the  matters  therein 
stated,  we  think  it  plain  that  if,  in  such  a  case,  the 
Commission  has  failed  in  its  proceedings  to  give 
notice  to  the  alleged  offender,  or  has  unduly  re- 
stricted its  inquiries  upon  a  mistaken  view  of  the 
law,  the  court  ought  not  to  accept  the  findings  of 
the  Commission  as  a  legal  basis  for  its  own  action, 
but  should  either  inquire  into  the  facts  on  its  own 
account,  or  send  the  case  back  to  the  Commission 
to  be  lawfully  proceeded  in." 

Agreements  and  Contracts  among  Competing  Rail- 
ways.—  That  the  effect  of  the  anti-pooling  provi- 
sions of  the  Interstate  Commerce  Act  has  been 
the  exact  opposite  of  what  was  intended,  has  for 
years  been  a  matter  of  public  knowledge.  The 
effort  to  prevent  by  law  agreements  among  com- 
peting railways  has  resulted  in  consolidation  —  a 
form  of  combined  effort  much  more  effective  and 

239 


RAILWAY    LEGISLATION 

lasting  in  its  consequences  than  any  pooling  ar- 
rangement could  ever  have  been.  The  union  of 
separate  and  formerly  competing  companies  into 
one  larger,  compact,  and  firmly  organized  corpora- 
tion is  something  with  which  the  federal  law  has 
never  been  concerned ;  but  the  looser  and  usually 
more  temporary  agreements  among  railways  are 
by  the  statute  expressly  declared  unlawful.  In 
addition,  the  law  contemplates  stability  of  rates, 
relatively  just  rates  and  other  like  ends,  which 
depend  upon  cooperation.  At  the  present  time 
the  larger  competitive  systems  of  the  United 
States  number  about  twenty,  while  at  the  time  of 
the  enactment  of  the  Interstate  Commerce  Act 
there  were  more  than  five  times  that  number.1 
That  this  has  been  the  universal  history  of  railway 
competition  is  a  fact  too  familiar  to  require  elabo- 
ration in  this  place.  "  When  we  view  the  facts  of 
railway  history,  the  steady  and  uninterrupted  con- 
solidations which  have  absorbed  line  after  line,  on 
the  one  hand  ;  and  the  contemporary  existence  and 
growth  and  duplication  of  laws  attempting  to  gov- 
ern these,  on  the  other,  the  conclusion  is  irresisti- 
ble that  somehow  these  laws  did  not  accomplish 
the  purposes  for  which  they  were  enacted."2 

The  first  important  decision  of  the  United  States 
Supreme  Court,  after  1887,  bearing  upon  agree- 
ments among  railways  was  the  decision  against  the 
Trans-Missouri  Freight  Association  in  1897.  This 

1  Consult  Newcomb,  "  Recent  Great  Railway  Combinations," 
Review  of  Reviews,  August,  1901.  2  p.  139. 

240 


COMMISSION   AND   COURTS 

association  had  been  formed  in  1889  "f°r  ^e  pur- 
pose of  mutual  protection  by  establishing  and 
maintaining  reasonable  rates,  rules,  and  regulations 
on  all  freight  traffic,  both  through  and  local." 
The  decision  involved  two  leading  questions : 
first,  Does  the  "act  to  protect  trade  and  com- 
merce against  unlawful  restraints  and  combina- 
tions," popularly  known  as  the  Sherman  Anti-Trust 
Law  of  1890,  apply  to  and  cover  railways?  Sec- 
ond, If  so,  does  the  Trans- Missouri  agreement 
violate  any  provisions  of  this  law?  The  court 
answered  both  questions  in  the  affirmative. 

The  Joint  Traffic  decision,1  which  followed  a 
year  and  a  half  later  and  covered  essentially  the 
same  ground,  involved  in  addition  several  subsid- 
iary questions  :  Does  the  Joint  Traffic  agreement 
actually  prevent  the  constituent  railways  from  com- 
peting with  one  another  ?  Is  the  Anti-Trust  Law 
constitutional  ?  And,  finally,  does  the  Joint  Traf- 
fic agreement  violate  the  anti-pooling  provisions 
of  the  Interstate  Commerce  Law?  As  to  the 
leading  questions,  the  court  held  that  the  Anti- 
Trust  Law  applies  to  all  combinations,  including 
those  among  common  carriers.  Combinations  "may 
be  different  in  different  kinds  of  corporations,  and 
yet  they  all  have  an  essential  similarity,  and  have 
been  induced  by  motives  of  individual  or  corporate 
aggrandizement  as  against  the  public  interest." 
The  decision  recounts  the  history  of  the  Anti-Trust 
Act  in  Congress,  which  goes  to  show  that  the  act 

1 171  u.  S.  505. 
R  241 


RAILWAY    LEGISLATION 

applies  to  the  Trans-Missouri  agreement,  and  that 
it  includes  every  contract  and  prohibits  every 
agreement  in  restraint  of  trade,  no  matter  what  its 
terms  may  be.  Hence  the  law  forbids  all  con- 
tracts, whether  just  or  unjust,  whether  in  reason- 
able or  unreasonable  restraint  of  trade.  "The 
claim  that  the  company  has  the  right  to  charge 
reasonable  rates,  and  that,  therefore,  it  has  the 
right  to  enter  into  combination  with  competing 
roads  to  maintain  such  rates,  cannot  be  admitted." 
Both  the  Interstate  Commerce  Law  and  the 
Anti-Trust  Law  have  thus  had  the  effect  of  dis- 
countenancing cooperative  arrangements  of  every 
kind  among  railways  other  than  that  closer  cooper- 
ation under  unified  management  in  corporate  form. 
Both  have  accelerated  the  natural  tendency  of  rail- 
ways toward  consolidation,  and  both  have  signally 
failed  in  accomplishing  the  purpose  for  which  they 
were  enacted.  Both  prohibit  associated  action  of 
companies  so  long  as  they  are  separate,  but  leave 
them  to  themselves  after  consolidation.1 

1  It  is  needless  to  say  that  this  statement,  while  true  as  a  general 
proposition,  requires  modification  in  so  far  as  the  actual  powers  of 
the  commission  permit  regulation;  nor  does  the  statement  take 
cognizance  of  that  form  of  railway  cooperation  which  is  said  to 
exist  upon  no  formal  agreements  but  rather  upon  what  "  any  one 
was  saying  as  he  looked  at  his  neighbor." 


242 


CHAPTER  IV 
THE  CULLOM  BILL 

IN  an  earlier  chapter1  the  writer  has  stated  three 
propositions  which  may  serve  as  an  introduction  to 
a  discussion  of  pending  legislation:  (i)  That  the 
present  situation  with  respect  to  railway  affairs  in 
the  United  States  is  untenable  and  indefensible. 
(2)  That  the  great  majority  of  railway  managers 
and  other  railway  officials  are  sincerely  desirous  of 
administering,  to  the  best  of  their  abilities,  the 
properties  under  their  control  in  the  most  efficient 
manner,  having  due  regard  for  the  interests  of 
both  the  stockholders  and  the  public  ;  but  that  all 
the  various  interests  affected  by  their  action  are 
not  represented  in  proportion  to  their  importance, 
if  at  all;  and  that  consequently  injustice  maybe 
done.2  (3)  That  there  is  nothing  in  the  present 
statutory  and  administrative  regulation  of  railways 
to  prevent  the  arbitrary  and  harmful  action  of  the 
weak  or  unscrupulous  manager  from  defeating  the 

1  Pt.  I,  ch.  iv. 

2  A  writer  on  criminal  law,  for  instance,  would  hardly  consider 
it  necessary  to  state  that  the  majority  of  citizens  were  neither  thieves 
nor  robbers.     Public  opinion  has  so  often  passed  judgment  on  rail- 
way men  en  masse  that  this  statement  appears  to  be  necessary  in 
the  present  connection. 

243 


RAILWAY    LEGISLATION 

desires  of  the  majority  of  the  officials,  who  would 
voluntarily  pursue  a  more  beneficent  course. 

The  third  proposition  bears  directly  upon  the 
present  status  of  the  Interstate  Commerce  Law. 
"  That  the  leading  traffic  officials  of  many  of  the 
principal  railway  lines  —  men  occupying  high  posi- 
tions and  charged  with  the  most  important  duties 
—  should  deliberately  violate  the  statute  law  of  the 
land,  and  in  some  cases  agree  with  each  other  to  do 
so  ;  that  it  should  be  thought  by  them  necessary  to 
destroy  vouchers  and  so  to  manipulate  bookkeep- 
ing as  to  obliterate  evidence  of  the  transactions; 
that  hundreds  of  thousands  of  dollars  should  be 
paid  in  unlawful  rebates  to  a  few  great  packing 
houses ;  that  the  business  of  railroad  transporta- 
tion, the  most  important  but  one  in  the  country 
to-day,  paying  the  highest  salaries  and  holding  out 
to  young  men  the  greatest  inducements,  should  to 
such  an  extent  be  conducted  in  open  disregard  of 
law  —  must  be  surprising  and  offensive  to  all  right- 
minded  persons.  Equally  startling,  at  least,  is  the 
fact  that  the  owners  of  these  packing  houses,  men 
whose  names  are  known  throughout  the  commer- 
cial world,  should  seemingly  be  eager  to  augment 
their  gains  with  the  enormous  amounts  of  these 
rebates,  which  they  receive  in  plain  defiance  of  a 
federal  statute.  These  facts  carry  their  own  com- 
ment, and  nothing  said  here  can  add  to  their  sig- 
nificance. The  Commission  is  not  unmindful  of 
the  palliating  circumstances  under  which  railway 
traffic  officials  act.  These  have  been  fully  set 

244 


THE    CULLOM    BILL 

forth  in  previous  reports,  and  the  Commission  has 
stated  in  that  connection  what,  in  its  opinion,  is 
the  proper  remedy.  We  certainly  believe  that 
existing  laws  should  be  so  amended  that  railway 
managers  who  desire  to  observe  them  can  do  so 
without  risk  of  sacrificing  their  property/'1  The 
Commission  may  mediate,  report,  advise,  investi- 
gate, order  —  all  good  things  in  themselves  and 
sometimes  very  effective ;  but  when  it  comes  to 
the  vital  point  of  enforcing  right  rules  of  action  it 
is  absolutely  helpless  in  practice,  irrespective  of 
what  theoretical  analyses  of  the  law  may  attribute 
to  it.  To  repeat  an  earlier  statement,  the  Com- 
mission may  recommend  everything  and  do  noth- 
ing. Neither  in  the  federal  law,  nor  in  the  laws  of 
a  single  state,  nor  in  the  laws  of  all  the  states  col- 
lectively does  there  exist  adequate  power  to  pro- 
tect the  railways  against  each  other,  on  the  one 
hand,  or  the  public  against  the  railways  on  the 
other.  In  view  of  such  a  situation,  amendments 
to  the  Interstate  Commerce  Law  are  imperative. 
Several  of  these  are  indispensable  ;  with  respect  to 
others,  compromises  might  well  be  resorted  to,  or 
they  might  be  omitted  altogether,  if  thereby  the 
work  of  bringing  into  existence  an  efficient  law 
can  be  facilitated. 

The  changes  contemplated  in  the  Cullom  Bill  2 
are   enumerated  differently  by  different    persons, 

1  Fifteenth  Annual  Report  (1901),  p.  6. 

2  Bill,  S.  1439,  56  Cong.,  i  Sess.    A  bill  to  amend  an  act  entitled 
"  An  Act  to  Regulate  Commerce,"  etc.     This  bill  has  not  yet  been 

245 


RAILWAY    LEGISLATION 

varying  in  number  from  several  to  nineteen,1  de- 
pending upon  individual  classifications  and  judg- 
ment. The  centre  of  the  "railway  problem  "  has 
always  been  the  question  of  rates,  and  it  is 
but  natural  that  the  nucleus  of  the  proposed 
amendments  should  consist  of  provisions  governing 
rates.  Under  the  present  Interstate  Commerce 
Law,  as  interpreted  by  the  Supreme  Court,  the 
Commission  has  no  power  to  prescribe  a  rate  for 
the  future.  The  Commission  has  power  to  pass 
upon  the  absolute  and  relative  reasonableness  of  a 
particular  rate  and,  if  the  rate  is  found  unreason- 
able, order  a  reduction  or  a  change  in  the  relations 
of  rates.  This  order  can  be  enforced  through  the 
courts.  "  Now  the  actual  history  of  these  suits 
shows  that  it  has  required  between  three  and  four 
years  to  arrive  at  a  conclusion."2  Let  us  assume 
three  years  as  the  average.  Suppose  a  certain 
rate  of  $1.2$  is  pronounced  unreasonable,  and  that 
$i  is  considered  reasonable.  The  latter  the  Com- 
mission cannot  prescribe  under  the  present  law, 
but  it  can  order  a  reduction  of  the  former.  A  re- 
calcitrant manager  satisfies  the  order  of  the  Com- 
mission by  reducing  the  rate  a  fractional  part  of  a 
cent,  after  three  years  of  litigation  in  the  courts. 
Even  at  the  rate  of  five  cents  per  order,  it  would 

taken  up  by  the  present  Congress.  A  similar  bill  was  introduced 
in  the  preceding  Congress  by  Senator  Cullom. 

1  Blanchard,  testimony  before  Senate  Committee  on  Interstate 
Commerce  (1900),  p.  382. 

2  Commissioner  Prouty,  testimony  before  Senate  Committee  on 
Interstate  Commerce  (1900),  p.  37. 

246 


THE    CULLOM    BILL 

require  fifteen  years  to  establish  the  reasonable 
rate.  But  long  before  this  result  may  have  been 
achieved  new  contingencies  may  have  arisen,  and  a 
rate  which  at  first  appeared  reasonable  may  be 
most  unreasonable  under  the  changed  circum- 
stances. Practically  immediate  obedience  to  orders 
is  the  only  manner  in  which  carriers  and  shippers 
can  be  protected.  A  delay  of  some  duration,  or 
even  of  a  week,  may  change  the  situation  enough  to 
make  future  changes  relatively  valueless  to  the  com- 
plainant. Here,  as  in  so  many  other  cases,  we  are 
again  confronted  by  the  relentlessness  of  the  third 
proposition,  — there  exists  no  power  capable  of 
compelling  prompt  obedience.  "  Promptness," 
which  consumes  years  and  which  affects  interests 
based  upon  short  periods  of  time,  is  an  abuse  of  the 
English  language.  The  Cullom  Bill  provides  a 
remedy :  "  If  after  a  full  hearing  it  is  determined 
that  any  party  complainant  is  entitled  to  an  award 
of  damages  under  the  provisions  of  this  Act  for  a 
violation  of  its  provisions,  the  Commission  shall 
make  an  order  directing  the  carrier  to  pay  to  the 
complainant  the  sum  to  which  he  is  entitled  on  or 
before  a  day  named.  If,  after  such  hearing,  it  is 
determined  that  any  carrier  is  in  violation  of  the 
provisions  of  this  Act,  the  Commission  shall  make 
an  order  directing  such  carrier  to  cease  and  desist 
from  such  further  violation,  and  shall  prescribe  in 
such  order  the  thing  which  the  carrier  is  required  to 
do  or  not  to  do  for  the  future  to  bring  itself  into 
conformity  with  the  provisions  of  this  Act ;  and  in 

247 


RAILWAY    LEGISLATION 

so  doing  it  shall  have  power  (a)  to  fix  a  maximum 
rate  covering  the  entire  cost  of  the  service,  (d)  to  fix 
both  a  maximum  and  minimum  rate,  or  differential 
in  rate,  when  that  may  be  necessary  to  prevent 
discrimination  under  the  third  section,  (c)  to  deter- 
mine the  division  between  carriers  of  a  joint  rate 
and  the  terms  and  conditions  under  which  business 
shall  be  interchanged  when  that  is  necessary  to  an 
execution  of  the  provisions  of  this  Act,  (d)  to  make 
changes  in  classification,  (e)  to  so  amend  the  rules 
and  regulations  under  which  traffic  moves  as  to 
bring  them  into  conformity  with  the  provisions  of 
this  Act." 

The  foregoing  enumeration  of  powers  shall  not  ex- 
clude any  power  which  the  Commission  would  other- 
wise have  in  the  making  of  an  order  under  the 
provisions  of  this  Act.  An  order  not  for  the  pay- 
ment of  money  shall  be  termed  an  administrative 
order.  "  Every  order  shall  fix  the  date  when  it  is  to 
take  effect,  which  shall  in  no  case  be  less  than  ten 
and  ordinarily  not  less  than  thirty  days  from  the 
service  of  such  an  order  upon  the  carrier.  Such 
order  shall  be  forthwith  served  by  mailing  to  any 
one  of  the  principal  officers  or  agents  of  the  carrier 
at  his  usual  place  of  business  a  copy  of  the  report 
and  opinion  of  the  Commission,  together  with  a 
copy  of  the  order,  and  the  registry  mail  receipt 
shall  \>z  prima  facie  evidence  of  the  receipt  of  such 
order  by  the  carrier  in  due  course  of  mail." 

Perhaps  the  most  important  feature  of  this  sec- 
tion is  the  power  which  it  gives  to  the  Commission 

248 


THE    CULLOM    BILL 

to  prescribe  what  "to  do  or  not  to  do  for  the 
future  "  in  order  to  bring  about  a  line  of  action  in 
harmony  with  the  law.  What  follows  are  essen- 
tially consequences  and  conditions.  Charters  and 
earlier  laws  took  care  to  prescribe  maximum  rates, 
which  were  frequently  placed  so  ridiculously  high 
that  practically  no  railway  manager  would  ever 
think  of  charging  them.  Minimum  rates  were 
rarely  prescribed,  and  differentials  never.  It  is 
otherwise  with  the  proposed  law.  The  establish- 
ment of  minimum  and  differential  rates  is  at 
present  of  infinitely  greater  consequence  than  the 
prescription  of  maximum  charges.  The  power  of 
the  Commission  in  determining  divisions  of  through 
rates  is  likely  to  do  away  with  one  of  the  sources 
of  discriminations. 

All  legislation  rests  upon  the  assumption  of  a 
reasonable  purpose,  and  the  prevalence  of  good 
sense  among  administrators  of  the  law.  Unless 
one  is  willing  to  attribute  to  the  Interstate  Com- 
merce Commission  the  lack  of  a  reasonable  pur- 
pose, as  well  as  love  of  fair  play  and  justice,  and 
of  ordinary  good  sense,  the  opposition  to  the  "  rate- 
making  powers "  contemplated  in  the  proposed 
law  is  at  once  unwarranted  and  fallacious.  Noth- 
ing but  abstract  dialecticism  and  jugglery  with 
"  transcendental  "  words  can  lead  to  the  unreason- 
able conclusion  that  such  a  power  over  the  rate  will 
vest  the  Commission  with  authority  to  establish 
the  market  price  of  a  commodity  or  service  (trans- 
portation) in  an  arbitrary  manner,  and  place  the 

249 


RAILWAY    LEGISLATION 

manufacturers  of  this  commodity  in  an  unfavorable 
position  in  the  financial  control  of  their  properties. 
If,  in  the  last  instance,  we  must  choose  between 
a  rate  established  by  a  manager,  practically  unre- 
stricted by  law,  whose  business  and  duty  it  is  to 
take  the  railway  point  of  view,  and  a  rate  pro- 
nounced reasonable  by  a  body  of  five  capable  men 
whose  highest  function  it  is  to  view  impartially  the 
interests  of  the  public  and  of  the  railways,  there 
can  be  no  mistake  in  accepting  the  judgment  of 
the  latter,  especially  when  their  judgment  is  sub- 
ject to  review  by  the  courts  and  is  safeguarded 
in  every  way  by  powers  directly  vested  by  the  bill 
in  the  judiciary. 

"  Any  carrier  may,  within  thirty  days  from  the 
service  of  an  administrative  order  upon  it,  begin, 
in  the  Circuit  Court  of  the  United  States  for  the 
district  in  which  its  principal  operating  office  is 
situated,  proceedings  to  review  such  an  order  and 
the  findings  on  which  it  is  based.  .  .  .  The  court 
may  also,  if  upon  an  inspection  of  the  record  it 
plainly  appears  that  the  order  proceeds  upon  some 
error  of  law  or  is  unjust  and  unreasonable  on  the 
facts,  and  not  otherwise,  suspend  the  operation  of 
the  order  during  the  pendency  of  the  proceedings 
in  review,  or  until  further  order  of  the  court. 
Either  party  may  appeal  from  the  judgment  or  de- 
cree of  the  Circuit  Court  to  the  Supreme  Court  of 
the  United  States ;  but  such  appeal  shall  not 
operate  to  stay  or  supersede  the  order  of  the  Cir- 
cuit Court  nor  the  execution  of  any  writ  or  process 

250 


THE    CULLOM    BILL 

thereon.  In  the  Supreme  Court  the  cause  shall 
be  given  preference  over  all  others,  excepting 
criminal  causes." 

Especial  emphasis  should  be  placed  upon  the 
promptness  with  which  a  carrier  can  find  a  remedy 
in  the  courts  in  case  the  Commission  should  make 
an  unjust  order.  For  fifteen  years  it  has  taken,  on 
the  average,  three  or  four  years  to  get  a  final  deci- 
sion ;  and  to  assert,  in  the  face  of  that  fact,  that 
the  proposed  law  affords  no  adequate  remedy  for 
unreasonable  orders  of  the  Commission,  sounds 
very  much  like  the  old  cry  of  "  stop  thief !  "  Fur- 
thermore, the  Commission  can  make  no  order  ex- 
cept after  a  full  and  impartial  hearing.  Having 
all  the  facts  before  it,  and  having  duly  weighed  the 
evidence,  the  Commission  may  revise  a  rate  fixed 
by  the  carriers  in  the  first  instance.  That  the 
Commission  should  be  incapable  of  properly  com- 
prehending the  facts  entering  into  a  question  of 
rates,  is  too  preposterous  to  admit  of  discussion. 
And  unless  we  are  willing  to  believe  the  absurd 
proposition  that  both  the  Commission  and  the  fed- 
eral courts  can  together  not  understand  a  rate  ques- 
tion and  decide  equitably  in  the  premises,  we  are 
compelled  to  admit  that  substantial  justice  will  be 
done  under  the  proposed  law  to  an  extent  hitherto 
unknown  —  justice  administered  with  promptness 
and  efficiency  to  carriers  and  shippers  alike  and  to 
competitive  cities,  harbors,  productive  areas,  and 
industries. 

In  connection  with  the  publication  of  rates  the 

251 


RAILWAY    LEGISLATION 

most  important  point  in  the  bill  determines  the 
relation  of  charges  actually  collected  to  the  tariffs 
contained  on  sheets  published  and  filed,  a  depar- 
ture from  the  latter  being  in  violation  of  law : 
"  Whenever  any  carrier  files  or  publishes  a  particu- 
lar rate  under  the  provisions  of  this  Act,  or  partici- 
pates in  any  rate  so  filed  or  published,  that  rate, 
as  against  such  carrier,  its  officers,  or  agents,  in 
any  prosecution  begun  under  this  Act,  shall  be 
conclusively  deemed  to  be  the  legal  rate,  and  any 
departure  from  such  rate,  or  any  offer  to  depart 
therefrom,  shall  be  deemed  to  be  an  unjust  dis- 
crimination. 

"Whenever,  on  the  trial  of  a  defendant  for  a 
violation  of  this  Act,  such  defendant  is  shown  to 
have  given,  aided,  abetted,  or  assisted  in  the  giving 
of  a  rate  to  one  or  more  individuals,  firms,  com- 
panies, or  corporations  different  from  the  rate  or 
rates  fixed  for  such  service  by  the  tariff  of  rates 
provided  for  by  this  Act,  such  showing  shall  be 
deemed  evidence  sufficient  to  authorize  a  convic- 
tion ;  and  it  shall  not  be  necessary  on  the  trial  of 
any  indictment  hereunderfor  unjust  discrimination 
to  allege  or  to  prove  that  other  and  less  favorable 
rates  were  offered  or  granted  to  other  shippers  by 
the  defendant,  or  to  allege  or  prove  the  names  of 
such  shippers,  the  true  intent  of  this  being  that 
the  published  tariff  shall  be  conclusive  evidence 
that  the  rates  therein  prescribed  were  the  rates 
charged  to  the  general  public/' 

Under  the  present  law  a  departure  from  the  pub- 
252 


THE    CULLOM    BILL 

lished  rate  is  not  unlawful  unless  it  can  be  shown 
that  the  degree  of  departure  is  different  for  differ- 
ent shippers.  For  instance,  if  a  published  rate  of 
one  dollar  is  assumed,  and  it  can  be  shown  that  A 
secured  a  rate  of  ninety  cents,  the  law  has  not  been 
violated  unless  it  can  also  be  shown  that  B  secured 
a  rate  of,  say,  eighty  cents.  In  other  words,  de- 
partures from  published  rates  are  not  discrimi- 
nations unless  such  departures  vary  for  different 
individuals,  a  fact  which  it  is  practically  impossible 
to  prove.  While  it  was  undoubtedly  the  intent  of 
section  x  of  the  act  to  impose  a  penalty  upon  the 
corporation  itself,  under  its  peculiar  phraseology, 
it  has,  however,  been  judicially  determined  that 
the  corporation  is  not  liable.  The  agent  alone  can 
be  punished.  Now  the  object  of  rate-cutting  is  to 
get  business  and  make  money,  and  the  corpora- 
tion, if  any  one,  profits  by  the  illegal  act.  It  is 
the  real  offender,  and  ought  certainly,  as  well  as 
its  officer,  to  pay  the  penalty.  It  is  anomalous 
and  unjust  that  the  representative  or  employee 
only  should  be  liable  to  prosecution,  while  the  real 
offender,  the  corporation,  the  principal,  and  bene- 
ficiary in  the  transaction,  is  not.  If  every  illegal 
act  of  that  character  subjected  the  carrier  to  a  sub- 
stantial forfeiture,  so  that  the  money  result  of  the 
transaction  was  likely  to  be  the  other  way,  the 
inducement  to  commit  such  offences  would  be 
greatly  diminished. 

In  the  Cullom  Bill  the  long  and  short  haul  sec- 
tion appears  in  a  radically  modified  state  by  the 

253 


RAILWAY    LEGISLATION 

omission  of  the  words  "  under  substantially  similar 
circumstances  and  conditions/'  thus  absolutely  pro- 
hibiting a  greater  charge  for  the  shorter  haul  un- 
less, as  under  the  present  law,  the  Commission 
authorizes  the  same.  The  change  will  prevent 
violations  of  the  long  and  short  haul  principle  that 
are  justified  on  the  ground  of  competition  among 
carriers  subject  to  the  act. 

From  a  theoretical  point  of  view  a  single  na- 
tional classification  of  freight  would  be  desirable, 
and  in  practice  such  a  classification  is  perhaps  not 
impossible,  although  the  reduction  of  the  number 
of  classifications  to  three  —  excepting  the  state 
classifications  —  has  greatly  reduced  the  inconven- 
ience and  discriminations  resulting  from  a  diver- 
sity of  classifications.  The  testimony  before  the 
Industrial  Commission  can  scarcely  be  said  to  give 
very  strong  support  to  the  idea  of  a  national  system  ; 
yet  that  same  testimony  offers  no  strong  and 
decisive  arguments  against  such  a  system.  The 
objection  that  commodities  like  oranges  and  cotton 
must  be  classified  differently  in  different  sections 
of  the  country,  which  would  not  be  permitted  under 
a  national  classification,  is  more  apparent  than  real ; 
for  these  and  similar  articles  could  be  carried,  as 
they  are  in  part  at  present,  at  commodity  rates, 
properly  adjusted  to  meet  the  conditions  of  trans- 
portation in  different  sections  of  the  United  States. 
Goods  carried  at  commodity  rates  constitute  the  bulk1 

1  The  great  mass  of  articles  in  point  of  numbers,  and  probably 
also  in  point  of  gross  revenue,  go  at  class  rates. 

254 


THE    CULLOM    BILL 

of  freight  carried  under  the  present  system,  and 
it  is  by  no  means  improbable  that  the  number 
of  commodity  rates  necessary  under  a  national 
system  of  classification  would  be  smaller  than 
that  now  in  existence.  The  testimony  is  all  but 
unanimous  that  commodity  rates  have  been  unduly 
extended.  An  experienced  railway  official  of  high 
rank  stated  to  the  writer  not  long  ago  that  some  day 
a  Napoleon  would  arise  in  the  railway  world  who 
would  "  demolish,  with  a  heavy  club,"  all  the  vast 
and  needlessly  complex  classification  structures,  and 
substitute  for  this  historical  agglomeration  a  simple 
classification  supplemented  by  a  reasonable  number 
of  commodity  rates.  That  the  task  of  elaborating 
a  national  classification  is  not  an  easy  or  simple 
one  is  obvious  ;  but  that  the  task  is  not  beyond  the 
ability  of  men  of  capacity  is  equally  obvious,  and 
one  can  discover  no  insuperable  obstacles  in  the 
way  of  the  Commission's  undertaking  this  work  in 
conference  with  railway  men.1 

1  It  is  not  desirable  to  enter  into  the  details  of  the  principles  and 
problems  of  classification.  However,  two  important  disadvantages 
inherent  in  the  present  system  should  not  be  overlooked,  (i)  The 
unjust  discriminations  which  occur  in  territories  where  the  classi- 
fications overlap  each  other.  For  instance,  the  Official  applies  to 
Chicago  and  the  Mississippi  River,  and  the  Western  from  Chicago 
and  the  Mississippi  River;  and  in  the  territory  between  Chicago 
and  the  Mississippi  numerous  complaints  of  injustice  from  different 
classifications  of  the  same  articles  have  arisen.  The  Official  applies 
on  traffic  from  Chicago  to  Norfolk  and  Richmond;  the  Southern 
applies  on  through  traffic  from  Chicago  to  Wilmington  and  other 
Carolina  cities,  and  wide  disparities  in  rates  to  competing  Carolina 
and  Virginia  towns  are  found  to  be  due  to  this  cause.  (2)  The 

255 


RAILWAY    LEGISLATION 

The  provisions  of  the  Cullom  Bill  as  to  railway 
accounting  are  worthy  of  notice.  The  Commission 
is  given  discretionary  power  to  prescribe  forms  of 
accounts.  This  has  already  been  done  to  a  con- 
siderable extent,  and  much  progress  has  been  made, 
moreover,  toward  uniformity  in  annual  reports. 
The  Commission  is  to  have  access  to  all  accounts 
at  all  times,  and  may  employ  experts  to  do  this 
work.  Some  railway  men  favor  this  provision, 
while  others  oppose  it  chiefly  on  the  ground  that  it 
gives  outsiders  access  to  information  which  can  be 
used  against  the  road.  This  objection  does  not 
seem  well  taken  unless  we  are  again  to  assume  lack 
of  good  judgment  and  fidelity  in  the  examiner. 
There  is  no  reason  to  suppose  that  the  examiners 
will  not  be  men  of  highest  ability  and  integrity. 
Supervision  of  railway  accounting  may  prevent 
improper  management  of  stock  and  bond  issues  — 
a  matter  which  past  railway  legislation  has  gener- 
ally neglected ;  and,  in  addition,  the  inspection  of 
accounts  might  become  an  efficient  method  of  stop- 
ping rebates.  There  is,  perhaps,  no  single  feature 
of  railway  evils  which  is  more  difficult  to  handle 
than  this,  and  even  the  inspection  of  books  need 
not  lead  to  &n  undue  optimism  with  respect  to  a 
final  solution. 

inability  to  fix  joint  through  tariffs  on  an  article  not  classified  the 
same  in  two  classifications,  and  where  the  local  rates  are  added  to 
make  the  total  through  charge.  An  example  is  the  through  traffic 
crossing  the  Mississippi,  on  which  rates  east  and  west  of  that  river, 
based  on  two  classifications,  are  combined. 

256 


THE    CULLOM    BILL 

The  subject  of  agreements  among  railways  is  less 
adequately  provided  for  in  the  Cullom  Bill.  If  the 
history  of  competition  in  railway  development  the 
world  over  proves  anything  conclusively,  it  estab- 
lishes the  futility  of  competition  as  a  workable 
basis  of  railway  operation  and  administration. 
While  a  certain  amount  of  competition  may  always 
persist  and  bring  about  improvements  in  the 
service,  speaking  generally,  competition  in  railway 
affairs  has  failed  at  nearly  every  point,  and  any 
legislation  which  rests  upon  the  doctrine  of  com- 
petition among  railways  must  inevitably  fail.  A 
prudent  course  of  action  would  recognize  the 
inadequacy  of  competition  and  accept  a  reasonable 
amount  of  freedom  for  carriers  in  making  agree- 
ments among  themselves,  subject  to  the  supervision 
of  the  Commission.  The  agreements  contemplated 
in  this  connection  are  more  comprehensive  than 
pooling  arrangements,  which  are  only  a  species  of 
which  the  other  is  the  genus.  The  history  of 
railway  pooling,  however,  does  not  afford  a  single 
forcible  argument  against  granting  to  railways 
the  privilege  of  cooperating  in  any  manner  which 
seems  expedient  to  them,  provided  such  cooperative 
arrangements  are  based  upon  contracts  properly 
scrutinized  and  supervised  and  enforcible  in  the 
courts.  Hence  a  provision  legalizing  organizations 
like  the  former  Joint  Traffic  Association  and  per- 
mitting agreements  among  railways  on  the  eight  or 
more  different  subjects  which  have  hitherto  been 
the  object  of  railway  agreements,  would  appear  to 
s  257 


RAILWAY    LEGISLATION 

be  desirable.     Clearing-house  arrangements  should 
also  be  facilitated. 

The  standing  which,  by  the  Cullom  Bill,  is  to  be 
given  in  the  courts  to  decisions  and  proceedings  of 
the  Commission  remedies  one  of  the  most  unfor- 
tunate weaknesses  in  the  present  statute.  Time 
and  again  the  case  before  the  court  has  been  made, 
through  the  introduction  of  new  facts,  an  entirely 
different  one  from  that  before  the  Commission. 
The  proposed  law  makes  this  impossible.  "  The 
proceedings  certified  from  the  Commission,  to- 
gether with  any  additional  testimony  taken  as 
above,  shall  constitute  the  record  upon  which  the 
case  shall  be  heard  by  the  Circuit  Court." 

With  respect  to  fines  for  violation  of  the  act,  a 
clearer  distinction  should,  perhaps,  be  made  be- 
tween fines  on  the  offending  person  and  fines  on 
the  guilty  corporation.  It  seems  a  gross  injustice 
to  mulct  a  man  for  doing  that  which  corporate 
management  may  compel  him  to  do.  Personal 
fines  may  be  wholesome  in  such  cases  as  making 
false  entries,  under-billing,  etc.,  but  these  should 
not  be  too  heavy.  The  bulk  of  the  pecuniary  loss 
following  an  infraction  of  the  law  should  fall  upon 
the  corporation.  Heavy  fines,  often  repeated, 
would  have  an  appreciable  influence  on  dividends, 
and  this  would  immediately  touch  the  pockets  of 
the  stockholders  and  bondholders  who,  in  turn, 
would  be  transformed  into  an  army  of  remonstra- 
tors  working  toward  a  reduction  in  the  number  of 
fines,  and  a  better  observance  of  the  law. 

258 


THE    CULLOM    BILL 

The  inclusion  in  the  Cullom  Bill  of  the  act  in 
relation  to  testimony  before  the  Interstate  Com- 
merce Commission,  passed  February  n,  1893,  is  a 
matter  of  convenience  and  does  not  affect  any- 
thing vital  in  the  measure. 

In  the  light  of  the  facts  presented  in  this  book 
it  would  seem  both  desirable  and  necessary  that 
the  increase  in  power  contemplated  in  the  Cullom 
Bill  should  be  granted.  However,  if  Congress 
does  not  see  fit  to  do  this,  it  is  to  be  hoped  that  an 
end  will  be  put  to  the  present  delay  in  the  execu- 
tion of  orders,  and  that  the  unscrupulous  manager 
will  no  longer  be  permitted  to  impose  his  code  of 
ethics  upon  the  great  majority  of  conscientious  and 
just  railway  officials. 

The  vigorous  protests  which  have  recently  been 
made  by  several  prominent  railway  officials  against 
an  increase  of  the  powers  of  the  Commission,  on 
the  ground  that  the  present  law  is  adequate  if  only 
the  Commission  will  properly  use  the  power  vested 
in  it,  carry  much  weight  because  of  the  high  stand- 
ing of  the  authors  of  these  protests.  Yet  the 
writer  has  been  unable  to  find  any  escape  from  the 
conclusions  presented  in  this  chapter,  and  nothing 
but  an  entirely  new  collection  of  facts,  differing  in 
import  from  those  now  available,  could,  it  seems, 
warrant  a  modification  of  these  conclusions. 


259 


RAILWAY   LEGISLATION 

NOTE.  —  The  Cullom  Bill  was  superseded  by  two  bills  l 
introduced  during  the  first  session  of  the  57th  Congress, 
which  in  turn  were  superseded  by  a  consolidated  bill 2  intro- 
duced during  the  second  session  (December  3,  1902)  of  the 
57th  Congress.  The  last  bill  is  now  on  the  calendar.  While 
these  bills  have  supplanted  the  Cullom  Bill,  everything  which 
has  been  said  in  the  discussion  of  the  latter  would  also  have 
to  be  said  in  regard  to  the  former.  The  content  of  a  discus- 
sion of  pending  legislation  would  be  essentially  the  same 
irrespective  of  the  special  bill  to  which  it  applies.  And  the 
historical  significance  of  the  Cullom  Bill  is  of  sufficient  im- 
portance to  warrant  the  retention  of  the  analysis  made  of  it 
in  this  chapter. 

House  bill  8337  provides  for  strict  adherence  to  the  pub- 
lished rates,  and  also  fines  shippers  for  making  false  repre- 
sentations as  to  classification,  in  order  to  secure  other  than 
published  rates.  The  Interstate  Commerce  Commission  is 
empowered,  on  complaint,  to  determine  rates,  the  relation 
of  rates,  classifications,  etc-,  for  the  future.  The  record  of 
the  hearings  before  the  commission  is  to  be  accepted  by 
the  court  as  the  basis  of  its  findings.  The  bill  provides 
for  appeals,  and  gives  the  United  States  courts  power  to 
enforce  obedience  to  the  law  and  in  general  to  exercise  full 
legal  jurisdiction. 

The  Senate  bill  3521  likewise  empowers  the  Interstate 
Commerce  Commission  to  prescribe,  in  certain  cases,  just 
and  reasonable  rates  for  the  future,  as  well  as  the  division 
of  rates  and  the  limits  of  time  during  which  its  orders  can 
be  enforced.  The  rates  thus  prescribed  are  reviewable  by 

1  (i)  H.  R.  8337:    A  Bill  to  amend  an  Act  entitled   "An  Act  to 
Regulate  Commerce,"  approved  February  4,  1887,  and  all  acts  amenda- 
tory thereof.    Introduced  by  Representative  Corliss,  and  in  the  Senate, 
in  identical  form,  by  Senator  Nelson. 

C1)  S.  3521:  A  Bill  to  enlarge  the  jurisdiction  and  powers  of  the 
Interstate  Commerce  Commission.  Introduced  by  Senator  Elkins. 

2  H.  R.  15592 :  A  Bill  to  enlarge  the  jurisdiction  and  powers  of  the 
Interstate  Commerce  Commission. 

260 


THE   CULLOM   BILL 

United  States  courts,  and  may  be  suspended  under  speci- 
fied conditions.  The  records,  testimony,  etc.,  of  the  com- 
mission shall  be  accepted  as  prima  facie  evidence  in  the 
United  States  courts,  and  additional  testimony  may  be  taken 
in  accordance  with  law.  The  method  of  appeal  is  also  de- 
scribed. Agreements  for  the  division  of  traffic  and  other 
species  of  cooperation  are  permitted,  and  the  commission  is 
empowered  to  investigate  such  pooling  and  other  arrange- 
ments on  complaint.  United  States  courts  are  empowered 
to  enforce  obedience,  and  in  the  case  of  railways  passing 
both  through  foreign  countries  and  through  the  United 
States,  traffic  in  the  United  States  may  be  suspended  on 
such  roads  in  order  to  enforce  the  act.  The  published 
rates  must  be  adhered  to  by  both  railways  and  shippers 
under  prescribed  penalties. 

The  third  bill  is  an  amended  form  of  the  second  so  as  to 
meet  the  main  provisions  of  the  first.  Important  railway  as 
well  as  commercial  interests  have  given  their  support  to  the 
measure,  and  interests  formerly  hostile  to  such  legislation  are 
said  to  have  acquiesced  in  it. 


261 


APPENDIX    I 

AN   AMERICAN   RAILWAY   CHARTER 

CHARTER   OF  THE   BALTIMORE   &   OHIO 
RAILROAD   COMPANY 

ACT  OF  FEBRUARY  28TH,  1827 

Passed  by  the  General  Assembly  of  Maryland 
Chapter  CXXIII 

I .  Be  it  enacted  by  the  General  Assembly  of  Maryland,  That 
Isaac  M'Kim,  Thomas  Ellicott,  Joseph  W.  Patterson,  John 
M1Kim,  Junior,  William  Stewart,  Talbot  Jones,  Roswell  L. 
Colt,  George  Brown,  and  Evan  Thomas,  be  and  they  are  here- 
by appointed  commissioners,  under  the  direction  of  a  majority 
of  whom  subscriptions  may  be  received  to  the  capital  stock  of 
the  Baltimore  and  Ohio  Rail  Road  Company,  hereby  incorpo- 
rated ;  and  they,  or  a  majority  of  them,  may  cause  books  to  be 
opened  at  such  times  and  places  as  they  may  direct,  for  the 
purpose  of  receiving  subscriptions  to  the  capital  stock  of  said 
company,  after  having  given  such  notice  of  the  times  and  places 
of  opening  the  same  as  they  may  deem  proper ;  and  that  upon 
the  first  opening  of  said  books,  they  shall  be  kept  open  for 
at  least  ten  successive  days,  from  ten  o'clock  A.M.  until  two 
o'clock  P.M.,  and  if  at  the  expiration  of  that  period  such  a  sub- 
scription to  the  capital  stock  of  said  company,  as  is  necessary 
to  its  incorporation,  shall  not  have  been  obtained,  the  said  com- 
missioners, or  a  majority  of  them,  may  cause  the  said  books  to 
be  opened,  from  time  to  time,  after  the  expiration  of  the  said 
263 


RAILWAY   LEGISLATION 

ten  days,  for  the  space  of  twelve  months  thereafter,  or  until 
the  sum  necessary  to  the  incorporation  of  the  company  shall 
be  subscribed,  if  sooner  subscribed ;  and  if  any  of  the  said 
commissioners  shall  die,  resign,  or  refuse  to  act,  during  the 
continuance  of  the  duties  devolved  upon  them  by  this  act, 
another  may  be  appointed  in  his  stead  by  the  remaining 
commissioners,  or  a  majority  of  them. 

2.  And  be  it  enacted,  That  the  capital  stock  of  the  said 
Baltimore  and  Ohio  Rail  Road  Company,  shall  be  three  millions 
of  dollars,  in  shares  of  one  hundred  dollars  each,  of  which  ten 
thousand  shares  shall  be  reserved  for  subscription  by  the  state 
of  Maryland,  and  five  thousand  for  the  city  of  Baltimore,  for 
the  space  of  twelve  months  after  the  passage  of  this  act  by  the 
legislature  of  Maryland,  and  the  remaining  fifteen  thousand 
shares  may  be  subscribed  for  by  any  other  corporation  or  by 
individuals ;  and  that  as  soon  as  ten  thousand  shares  of  the 
said  capital  stock  shall  be  subscribed,  the  subscribers  of  the 
said  stock,  their  successors  and  assigns,  shall  be,  and  they  are 
hereby  declared  to  be,  incorporated  into  a  company,  by  the 
name  of  The  Baltimore  and  Ohio  Rail  Road  Company,  and  by 
that  name  shall  be  capable  in  law  of  purchasing,  holding,  sell- 
ing, leasing  and  conveying,  estates  real,  personal  and  mixed,  so 
far  as  shall  be  necessary  for  the  purposes  hereinafter  mentioned, 
and  no  further ;  and  shall  have  perpetual  succession,  and  by 
said  corporate  name  may  sue  and  be  sued,  and  may  have  and 
use  a  common  seal,  which  they  shall  have  power  to  alter  or 
renew  at  their  pleasure,  and  shall  have,  enjoy  and  may  exer- 
cise, all  the  powers,  rights  and  privileges,  which  other  corporate 
bodies  may  lawfully  do,  for  the  purposes  mentioned  in  this  act. 

3.  And  be  it  enacted,  That  if  more  than  fifteen  thousand 
shares  shall  be  subscribed  to  the  capital  stock  of  said  company, 
not  reserved  to  the  state  of  Maryland,  or  to  the  city  of  Balti- 
more, the  said  commissioners,  or  a  majority  of  them,  shall 
reduce  the  subscription  to  fifteen  thousand  shares,  by  striking 
off  from  the  largest  number  of  shares  in  succession,  until  the 
subscriptions  are  reduced  to  fifteen  thousand  shares,  or  all  the 
subscriptions  to  one  share ;  and  if  there  still  be  an  excess,  then 

264 


APPENDIX 

lots  shall  be  drawn  by  the  commissioners  to  determine  who 
are  to  be  excluded. 

4.  And  be  it  enacted,  That  upon  every  such  subscription, 
there  shall  be  paid  at  the  time  of  subscribing  to  the  said  com- 
missioners, or  to  their  agents,  appointed  to  receive  such  sub- 
scriptions, the  sum  of  one  dollar  on  every  share  subscribed, 
and  the  residue  thereof  shall  be  paid  in  such  instalments,  and 
at  such  times,  as  it  may  be  required  by  the  president  and  di- 
rectors of  said  company ;  Provided,  that  not  more  than  one- 
third  of  the  subscription  be  demanded,  in  any  one  year  from  the 
commencement  of  the  work,  nor  any  payment  demanded  until 
at  least  sixty  days  public  notice  of  such  demand  shall  have 
been  given  by  the  said  president  and  directors ;  and  if  any 
subscriber  shall  fail  or  neglect  to  pay  any  instalment,  or  part 
of  said  subscription,  thus  demanded,  for  the  space  of  sixty  days 
next  after  the  time  the  same  shall  be  due  and  payable,  the 
stock,  on  which  it  is  demanded,  shall  be  forfeited  to  the  com- 
pany, and  may  be  sold  by  the  said  president  and  directors  for 
the  benefit  of  the  company ;  but  the  president  and  directors 
may  remit   any  such  forfeiture  on  such  terms  as  they  shall 
deem  proper. 

5.  And  be  it  enacted,  That  if  the  subscription  herein  made 
necessary  to  the  incorporation  of  the  said  company,  shall  not 
be  obtained  within  twelve  months  after  the  first  opening  of  the 
subscription  books  by  the  said  commissioners,  this  act,  and  all 
the  subscriptions  under  it,  shall  be  null  and  void ;  and  the  said 
commissioners,  after  discharging  the  expenses  of  opening  the 
books,  shall  return  the  residue  of  the  money,  paid  in  upon  such 
subscriptions,  to  the  several  subscribers,  in  proper  proportions 
to  the  sums  respectively  paid  in  by  them. 

6.  And  be  it  enacted,  That  at  the  expiration  of  the  ten  days 
for  which  the  books  are  first  opened,  if  ten  thousand  shares  of 
said  capital  stock  shall  have  been  subscribed,  or  if  not,  as  soon 
thereafter  as  the  same  shall  be  subscribed,  if  within  one  year 
after  the  first  opening  of  the  books,  the  said  commissioners,  or 
a  majority  of  them,  shall  call  a  general  meeting  of  the  sub- 
scribers, at  such  time  and  place  as  they  may  appoint,  and  shall 

265 


RAILWAY   LEGISLATION 

give  at  least  twenty  days  public  notice  thereof ;  and  at  such 
meeting  the  said  commissioners  shall  lay  the  subscription  books 
before  the  subscribers  then  and  there  present,  and  thereupon 
the  said  subscribers,  or  a  majority  of  them,  shall  elect  twelve 
directors,  by  ballot,  to  manage  the  affairs  of  said  company ;  and 
these  twelve  directors,  or  a  majority  of  them,  shall  have  the 
power  of  electing  a  president  of  said  company,  either  from 
among  the  directors,  or  others,  and  of  allowing  him  such  com- 
pensation for  his  services  as  they  may  deem  proper ;  and  that 
in  said  election,  and  on  all  other  occasions  wherein  a  vote  of  the 
stockholders  of  said  company  is  to  be  taken,  each  stockholder 
shall  be  allowed  one  vote  for  every  share  owned  by  it,  him  or 
her,  and  every  stockholder  may  depute  any  other  person  to  vote 
and  act  for  it,  him  or  her,  as  its,  his  or  her  proxy,  and  the 
commissioners  aforesaid,  or  any  three  or  more  of  them,  shall 
be  judges  of  the  said  first  election  of  directors. 

7.  And  be  it  enacted,  That  to  continue  the  succession  of  the 
president  and  directors  of  said  company,  twelve  directors  shall 
be  chosen  annually,  on  the  second  Monday  of  October  in  every 
year,  in  the  city  of  Baltimore,  by  the  stockholders  of  said  com- 
pany, and  that  the  state  of  Maryland,  and  the  city  of  Baltimore, 
may  each  appoint  one  additional  director  of  said  company  for 
every  twenty-five  hundred  shares  of  stock  of  said  company  by 
them  respectively  owned  at  the  time  of  such  election,  but  shall 
not  be  permitted  to  vote  upon  their  stock  in  the  election  of  the 
directors  by  the  stockholders,  in  general  meeting ;  and  that  the 
directors  of  said  company,  or  a  majority  of  them,  shall  have 
power  to  appoint  judges  of  all  elections,  and  to  elect  a  president 
of  said  company,  either  from  amongst  the  directors,  or  others, 
and  to  allow  him  such  compensation  for  his  services  as  they 
may  deem  proper ;  and  if  any  vacancy  shall  occur  by  death, 
resignation,  or  refusal  to  act,  of  any  president  or  director,  be- 
fore the  year  for  which  he  was  elected  has  expired,  a  person 
to  fill  such  vacant  place,  for  the  residue  of  the  year,  may  be 
appointed  by  the  president  and  directors  of  said  company,  or  a 
majority  of  them ;  and  that  the  president  and  directors  of  the 
company  shall  hold  and  exercise  their  offices  until  a  new  elec- 
266 


APPENDIX 

tion  of  president  and  directors ;  and  that  all  elections  which 
are  by  this  act,  or  by  the  laws  of  said  company,  to  be  made  on 
a  particular  day,  or  at  a  particular  time,  if  not  made  on  such 
day,  or  at  such  time,  may  be  made  at  any  time  within  thirty 
days  thereafter. 

8.  And  be  it  enacted,  That  a  general  meeting  of  the  stock- 
holders of  said  company  shall  be  held  annually,  at  the  time  and 
place  appointed  for  the  election  of  the  president  and  directors 
of  said  company ;  that  they  may  be  called  at  any  time  during 
the  interval  between  said  annual  meetings  by  the  president 
and  directors,  or  a  majority  of  them,  or  by  the  stockholders 
owning  at  least  one-fourth  of  the  whole  stock  subscribed,  upon 
giving  thirty  days  public  notice  of  the  time  and  place  of  holding 
the  same  ;  and  when  any  such  meetings  are  called  by  the  stock- 
holders, such  notice  shall  specify  the  particular  object  of  the 
call ;  and  if  at  any  such  called  meetings  a  majority  (in  value) 
of  the  stockholders  of  said  company  are  not  present,  in  person 
or  by  proxy,  such  meetings  shall  be  adjourned  from  day  to  day, 
without  transacting  any  business,  for  any  time  not  exceeding 
three  days,  and  if  within  said  three  days,  stockholders  having 
a  majority  (in  value)  of  the  stock  subscribed  do  not  thus  attend, 
such  meeting  shall  be  dissolved. 

9.  And  be  it  enacted,  That  at  the  regular  annual  meetings  of 
the  stockholders  of  said  company,  it  shall  be  the  duty  of  the 
president  and  directors,  in  office  for  the  preceding  year,  to  ex- 
hibit a  clear  and  distinct  statement  of  the  affairs  of  the  company ; 
that  at  any  called  meetings  of  the  stockholders,  a  majority  of 
those  present  may  require  similar  statements  from  the  president 
and  directors,  whose  duty  it  shall  be  to  furnish  them  when 
thus  required,  and  that"  at  all  general  meetings  of  the  stock- 
holders, a  majority  (in  value)  of  all  the  stockholders  in  said 
company,  may  remove  from  office  any  president,  or  any  of  the 
directors  of  said  company,  and  may  appoint  others  in  their  stead. 

10.  And  be  it  enacted,  That  every  president  and  director  of 
said  company,  before  he  acts  as  such,  shall  swear,  or  affirm,  as 
the  case  may  be,  that  he  will  well  and  truly  discharge  the  duties 
of  his  said  office,  to  the  best  of  his  skill  and  judgment. 

267 


RAILWAY   LEGISLATION 

1 1 .  And  be  it  enacted,  That  if  any  of  the  said  fifteen  thousand 
shares  of  the  capital  stock  of  said  company,  not  reserved  to  the 
city  of  Baltimore,  or  to  the  state  of  Maryland,  shall  remain 
unsubscribed  until  the  organization  of  the  said  company,  or  if 
the  shares  of  said  capital  stock  herein  before  reserved  to  the 
said  state  or  city,  or  any  part  of  them,  shall  be  subscribed  by 
said  state  or  city  respectively,  during  the  time  for  which  such 
stock  is  reserved  for  them,  in  either  case  the  president  and 
directors  of  the  said  company,  or  a  majority  of  them,  shall  have 
power  to  open  books,  and  to  receive  subscriptions  to  any  of  the 
capital  stock  of  said  company  which  may  thus  remain  unsub- 
scribed for,  or  to  sell  or  dispose  of  such  unsubscribed  stock  for 
benefit  of  the  company,  for  any  sum  not  under  its  par  value ; 
and  the  purchasers  or  subscribers  of  such  stock  shall  have  all 
the  rights,  powers  and  privileges,  of  original  subscribers,  and 
shall  be  subject  to  the  same  regulations. 

12.  And  be  it  enacted,  That  the  said  president  and  directors, 
or  a  majority  of  them,  may  appoint  all  such  officers,  engineers, 
agents  or  servants  whatsoever,  as  they  may  deem  necessary  for 
the  transaction  of  the  business  of  the  company,  and  may  remove 
any  of  them  at  their  pleasure  ;  that  they,  or  a  majority  of  them, 
shall  have  power  to  determine,  by  contract,  the  compensation 
of  all  the  engineers,  officers,  agents  or  servants,  in  the  employ 
of  said  company,  and  to  determine  by  their  by-laws,  the  man- 
ner of  adjusting  and  settling  all  accounts  against  the  company, 
and  also  the  manner  and  evidence  of  transfers  of  stock  in  said 
company ;  and  that  they,  or  a  majority  of  them,  shall  have 
power  to  pass  all  by-laws,  which  they  may  deem  necessary  or 
proper  for  exercising  all  the  powers  vested  in  the  company 
hereby  incorporated,  and  for  carrying  the  objects  of  this  act 
into  effect ;  Provided  only,  that  such  by-laws  shall  not  be  con- 
trary to  the  laws  of  the  United  States,  or  the  laws  of  any  of  the 
states  assenting  to  this  act,  or  any  of  the  provisions  of  this  act. 

13.  And  be  it  enacted,  That  if  the  capital  stock  of  said  com- 
pany shall  be  deemed  insufficient  for  the  purposes  of  this  act,  it 
shall  and  may  be  lawful  for  the  president  and  directors  of  said 
company,  or  a  majority  of  them,  from  time  to  time,  to  increase 

268 


APPENDIX 

the  said  capital  stock  by  the  addition  of  as  many  shares  as 
they  may  deem  necessary,  for  which  they  may  at  their 
option  cause  subscriptions  to  be  received  in  the  manner 
prescribed  by  them,  or  may  sell  the  same  for  the  benefit 
of  the  company,  for  any  sum  not  under  their  par  value ; 
and  that  they,  or  a  majority  of  them,  shall  have  power 
to  borrow  money  for  the  objects  of  this  act,  to  issue 
certificates  or  other  evidences  of  such  loans,  and  to  pledge 
the  property  of  the  company  for  the  payment  of  the  same, 
and  its  interest. 

14.  And  be  it  enacted,  That  the  president  and  directors  of 
said  company  shall  be  and  they  are  hereby  invested  with  all 
the  rights  and  powers  necessary  to  the  construction  and  repair 
of  a  rail  road  from  the  city  of  Baltimore,  to  some  suitable  point 
on  the  Ohio  river,  to  be  by  them  determined,  not  exceeding 
sixty-six  feet  wide,  with  as  many  sets  of  tracks  as  the  said 
president  and  directors,  or  a  majority  of  them,  may  deem 
necessary ;  and  they  or  a  majority  of  them,  may  cause  to  be 
made,  or  contract  with  others  for  making,  said  rail  road,  or  any 
part  of  it ;  and  they,  their  agents,  or  those  with  whom  they 
may  contract  for  making  any  part  of  the  same,  or  their  agents, 
may  enter  upon  and  use,  and  excavate,  any  land  which  may  be 
wanted  for  the  site  of  said  road,  or  the  erection  of  warehouses, 
or  other  works  necessary  to  said  road,  or  for  any  other  purpose 
necessary  or  useful  in  the  construction  or  repair  of  said  road, 
or  its  works,  and  that  they  may  build  bridges,  may  fix  scales 
and  weights,  may  lay  rails,  may  take  and  use  any  earth,  timber, 
gravel,  stone,  or  other  materials,  which  may  be  wanted  for  the 
construction  or  repair  of  any  part  of  said  road,  or  any  of  its 
works ;  and  may  make  and  construct  all  works  whatsoever, 
which  may  be  necessary  and  expedient,  in  order  to  the  proper 
completion  of  said  road ;  and  that  they,  or  a  majority  of  them, 
may  make,  or  cause  to  be  made,  lateral  rail  roads,  in  any  direc- 
tion whatsoever,  in  connexion  with  said  rail  road  from  the  city 
of  Baltimore  to  the  Ohio  river,  and  in  the  construction  of  the 
same,  or  their  works,  shall  have,  possess,  and  may  exercise,  all 
the  rights  and  powers  hereby  given  to  them  in  order  to  the 

269 


RAILWAY   LEGISLATION 

construction  or  repair  of  the  said  rail  road  from  the  city  of 
Baltimore  to  the  Ohio  river. 

15.  And  be  it  enacted,  That  the  president  and  directors  of 
said  company,  or  a  majority  of  them,  or  any  person  or  persons 
authorized  by  a  majority  of  them,  may  agree  with  the  owner 
or  owners  of  any  land,  earth,  timber,  gravel,  stone,  or  other 
materials,  or  any  improvements  which  may  be  wanted  for  the 
construction  or  repair  of  any  of  said  roads,  or  of  any  of  their 
works,  for  the  purchase  or  use  and  occupation  of  the  same,  and 
if  they  cannot  agree,  or  if  the  owner  or  owners,  or  any  of  them, 
be  a  feme  covert,  under  age,  non  compos  mentis,  or  out  of  the 
county  in  which  the  property  wanted  may  lie,  when  such  land 
or  materials  shall  be  wanted,  application  may  be  made  to  any 
justice  of  the  peace  of  such  county,  who  shall  thereupon  issue 
his  warrant,  under  hand  and  seal,  directed  to  the  sheriff  of  said 
county,  requiring  him  to  summon  a  jury  of  twenty  inhabitants 
of  said  county,  not  related  nor  in  anywise  interested,  to  meet  on 
the  land,  or  near  to  the  other  property  or  materials  to  be  valued, 
on  a  day  named  in  said  warrant,  not  less  than  ten  nor  more  than 
twenty  days  after  the  issuing  of  the  same,  and  if  at  said  time 
and  place  any  of  said  jurors  summoned  do  not  attend,  the  said 
sheriff  shall  immediately  summon  as  many  jurors,  as  may  be 
necessary  with  the  jurors  in  attendance,  to  furnish  a  panel  of 
twenty  jurors  in  attendance,  and  from  them  each  party,  or  its, 
his,  her,  or  their  agent,  if  either  be  not  present  in  person  or  by 
agent,  the  sheriff  for  him,  her,  it  or  them,  may  strike  off  four 
jurors,  and  the  remaining  twelve  shall  act  as  the  jury  of  inquest 
of  damages  ;  and  before  they  act  as  such,  the  said  sheriff  shall 
administer  to  each  of  them  an  oath,  or  affirmation,  as  the  case 
may  be,  that  he  will  justly  and  impartially  value  the  damages 
which  the  owner  or  owners  will  sustain  by  the  use  or  occupation 
of  the  same  required  by  the  company ;  and  the  jury  in  estimating 
such  damages  shall  take  into  the  estimate  the  benefit  resulting  to 
the  said  owner  or  owners  from  conducting  such  rail  road  through, 
along  or  near,  to  the  property  of  said  owner  or  owners,  but  only 
in  extinguishment  of  the  claim  for  damages  ;  and  the  said  jury 
shall  reduce  their  inquisition  to  writing,  and  shall  sign  and  seal 
270 


APPENDIX 

the  same,  and  it  shall  then  be  returned  by  said  sheriff  to  the 
clerk  or  prothonotary  of  his  county,  as  the  case  may  be,  and  by 
such  clerk  or  prothonotary,  filed  in  his  court,  and  shall  be  con- 
firmed by  said  court  at  its  next  session,  if  no  sufficient  cause  to 
the  contrary  be  shewn ;  and  when  confirmed,  shall  be  recorded 
by  said  clerk  or  prothonotary,  at  the  expense  of  said  company, 
but  if  set  aside,  the  said  court  may  direct  another  inquisition  to 
be  taken  in  the  manner  above  prescribed  ;  and  such  inquisition 
shall  describe  the  property  taken,  or  the  bounds  of  the  land 
condemned,  and  the  quantity  or  duration  of  the  interest  in  the 
same,  valued  for  the  company,  and  such  valuation,  when  paid 
or  tendered  to  the  owner  or  owners  of  said  property,  or  his,  her, 
or  their  legal  representatives,  shall  entitle  the  said  company  to 
the  estate  and  interest  in  the  same  thus  valued,  as  fully  as  if  it 
had  been  conveyed  by  the  owner  or  owners  of  the  same ;  and 
the  valuation,  if  not  received  when  tendered,  may  at  any  time 
thereafter  be  received  from  the  company,  without  costs,  by  the 
said  owner  or  owners,  or  his,  her,  or  their  legal  representative 
or  representatives. 

1 6.  And  be  it  enacted,  That  wherever,  in  the  construction  of 
said  road  or  roads,  it  shall  be  necessary  to  cross  or  intersect  any 
established  road  or  way,  it  shall  be  the  duty  of  the  president 
and  directors  of  said  company  so  to  construct  the  said  road 
across  such  established  road  or  way,  as  not  to  impede  the  pas- 
sage or  transportation  of  persons  or  property  along  the  same ; 
or  where  it  shall  be  necessary  to  pass  through  the  land  of  any 
individual,  it  shall  also  be  their  duty  to  provide  for  such  indi- 
vidual proper  wagon-ways  across  said  road  or  roads,  from  one 
part  of  his  land  to  the  other. 

17.  And  be  it  enacted,  That  whensoever  it  shall  be  necessary 
for  said  company  to  have,  use  or  occupy,  any  lands,  materials, 
or  other  property,  in  order  to  the  construction  or  repair  of  any 
part  of  said  road  or  roads,  or  their  works  or  necessary  buildings, 
the  president  and  directors  of  said  company,  or  their  agents,  or 
those  contracting  with  them  for  making  or  repairing  the  same, 
may  immediately  take  and  use  the  same,  (they  having  first 
caused  the  property  wanted  to  be  viewed  by  a  jury,  formed  in 

271 


RAILWAY   LEGISLATION 

the  manner  herein  before  prescribed,)  in  those  cases  where  the 
property  is  to  be  changed  or  altered  by  admixture  with  other 
substances  before  such  alteration  is  made,  and  that  it  shall  not 
be  necessary,  after  such  view,  in  order  to  the  use  or  occupation 
of  the  same,  to  wait  the  issue  of  the  proceedings  upon  such  view ; 
and  the  inquest  of  the  jury,  after  confirmation  and  after  payment 
or  tender  of  the  valuation,  shall  be  a  bar  to  all  actions  for  taking 
or  using  such  property,  whether  commenced  before  or  after  such 
confirmation,  or  the  payment  of  said  valuation. 

1 8.  And  be  it  enacted,  That  the  said  president  and  directors, 
or  a  majority  of  them,  shall  have  power  to  purchase,  with  the 
funds  of  said  company,  and  place  on,  any  rail  road  constructed 
by  them  under  this  act,  all  machines,  wagons,  vehicles,  or  car- 
riages of  any  description  whatsoever,  which  they  may  deem 
necessary  or  proper  for  the  purposes  of  transportation  on  said 
road,  and  they  shall  have  power  to  charge  for  tolls  upon  (and 
the  transportation  of  persons,)  goods,  produce,  merchandise,  or 
property  of  any  kind  whatsoever,  transported  by  them  along 
said  railway  from  the  city  of  Baltimore  to  the  Ohio  river,  any 
sum  not  exceeding  the  following  rates,  viz.  On  all  goods,  pro- 
duce, merchandise,  or  property  of  any  description  whatsoever, 
transported  by  them  from  west  to  east,  not  exceeding  one  cent 
a  ton  per  mile  for  toll,  and  three  cents  a  ton  per  mile  for  trans- 
portation ;  on  all  goods,  produce,  merchandise,  or  property  of 
any  description  whatsoever,  transported  by  them  from  east  to 
west,  not  exceeding  three  cents  a  ton  per  mile  for  tolls,  and 
three  cents  a  ton  per  mile  for  transportation,  and  for  the 
transportation  of  passengers  not  exceeding  three  cents  per 
mile  for  each  passenger;  and  it  shall  not  be  lawful  for  any 
other  company,  or  any  person  or  persons  whatsoever,  to  travel 
upon  or  use  any  of  the  roads  of  said  company,  or  to  transport 
persons,  merchandise,  produce,  or  property  of  any  description 
whatsoever,  along  said  roads,  or  any  of  them,  without  the 
license  or  permission  of  the  president  and  directors  of  said 
company;  and  that  the  said  road  or  roads,  with  all  their 
works,  improvements  and  profits,  and  all  the  machinery  of 
transportation  used  on  said  road,  are  hereby  vested  in  the 
272 


APPENDIX 

said  company,  incorporated  by  this  act,  and  their  successors, 
forever ;  and  the  shares  of  the  capital  stock  of  the  said  com- 
pany shall  be  deemed  and  considered  personal  estate,  and 
shall  be  exempt  from  the  imposition  of  any  tax  or  burthen 
by  the  states  assenting  to  this  law. 

19.  And  be  it  enacted,  That  the  said  president  and  directors 
shall  annually,  or  semi-annually,  declare  and  make  such  divi- 
dend as  they  may  deem  proper,  of  the  net  profits  arising  from 
the  resources  of  the  said  company,  after  deducting  the  necessary 
current  and  probable  contingent  expenses  ;  and  that  they  shall 
divide  the  same  amongst  the  proprietors  of  the  stock  of  said 
company,  in  proper  proportions  to  their  respective  shares. 

20.  And  be  it  enacted,  That  if  any  person  or  persons  shall 
wilfully,  by  any  means  whatsoever,  injure,  impair  or  destroy, 
any  part  of  any  rail  road,  constructed  by  said  company  under 
this  act,  or  any  of  their  necessary  works,  buildings,  carriages, 
vehicles  or  machines,  of  said  company,  such  person  or  persons,  so 
offending,  shall,  each  of  them,  for  every  such  offence,  forfeit  and 
pay  to  the  said  company  the  sum  of  five  hundred  dollars,  which 
may  be  recovered  in  the  name  of  said  company,  by  an  action  of 
debt,  in  the  county  court  of  the  county  wherein  the  offence 
shall  be  committed,  and  shall  also  be  subject  to  indictment  in 
said  court,  and  upon  conviction  of  such  offence,  shall  be  punished 
by  fine  and  imprisonment,  in  the  discretion  of  the  court. 

21.  And  be  it  enacted,  That  as  soon  as  this  act  shall  have 
been  passed  by  the  legislature  of  Maryland,  books  may  be 
opened,  subscriptions  received,  and  the  said  company  organ- 
ized, and  that  when  organized  the  said  company,  and  the 
president  and  directors  of  the  same,  shall  have  all  the  powers, 
rights  and  privileges,  granted  by  this  act,  and  shall  be  subject 
to  all  its  regulations  in  constructing  or  repairing  any  of  the 
said  rail  roads  or  other  necessary  works  or  buildings  which 
may  or  can  be  constructed  within  the  limits  of  the  state  of 
Maryland,  and  in  transporting  persons,  goods,  merchandise, 
or  property  of  any  description,  along  any  of  said  roads,  and 
that  the  provisions  of  this  act  shall  be  wholly  in  force,  as  to 
all  the  property  of  the  company,  which  may  be  situated  or 

T  273 


RAILWAY   LEGISLATION 

may  be  within  the  state  of  Maryland,  and  which  said  com- 
pany is  permitted  to  hold  under  this  act. 

22.  And  be  it  enacted,  That  if  said  road  shall  not  be  com- 
menced in  two  years  from  the  passage  of  this  act,  and  shall  not 
be  finished  within  this  state  in  ten  years  from  the  time  of  the 
commencement  thereof,  then  this  act  shall  be  null  and  void. 

23.  And  be  it  enacted,  That  full  right  and  privilege  is  hereby 
reserved  to  the  citizens  of  this  state,  or  any  company  hereafter 
to  be  incorporated  under  the  authority  of  this  state,  to  connect 
with  the  road  hereby  provided  for,  any  other  rail  road  leading 
from  the  main  route  to  any  part  or  parts  of  this  state,  provided 
that  in  forming  such  connection  no  injury  shall  be  done  to  the 
works  of  the  company  hereby  incorporated. 


274 


APPENDIX    II 

ARTICLES   OF   INCORPORATION   UNDER 
GENERAL   LAWS 

SOUTHERN   RAILWAY   COMPANY 
JUNE  1 8,  1894 

2C0  all  to  fof)0tn  tfjm  Pregente  mag  come: 

The  undersigned,  whose  names  are  hereto  subscribed, 
CHARLES  H.  COSTER  and  ANTHONY  J.  THOMAS,  a  Purchasing 
Committee  (hereinafter  called  PURCHASERS)  who  did  pur- 
chase the  railroad  and  other  p&te&ty  of  The  Richmond  and 
Danville  Railroad  Company  at 'a  sale  thereof  held  in  the  City 
of  Richmond  on  the  I5th  day  of  June,  1894,  under  a  decree 
of  foreclosure  and  sale  entered  on  the  i$th  day  of  April,  1894, 
in  a  certain  suit  in  equity  pending  in  the  Circuit  Court  of  the 
United  States  of  America  for  the  Eastern  District  of  Virginia, 
wherein  the  Central  Trust  Company  of  New  York  and  others 
were  complainants,  and  The  Richmond  and  Danville  Railroad 
Company,  a  corporation  created  by  and  existing  under  the 
laws  of  the  State  of  Virginia,  was  defendant,  in  which  suit  it 
was  sought  to  foreclose  the  consolidated  mortgage,  dated  the 
22d  day  of  October  in  the  year  1886,  and  upon  or  about  that 
day  duly  executed,  acknowledged  and  delivered  by  said  rail- 
road corporation  to  said  Central  Trust  Company  of  New 
York,  and  subsequently  supplemented  and  confirmed  by  said 
railroad  corporation  by  instruments  dated  November  i,  1886, 

275 


RAILWAY   LEGISLATION 

and  April  30,  1888,  respectively,  in  which  suit  also  it  w; 
undertaken  to  sell  the  whole  of  the  mortgaged  property  ar 
premises,  being  the  rights,  property,  privileges  and  franchisi 
of  said  The  Richmond  and  Danville  Railroad  Company, 
which  Purchasing  Committee  the  Special  Masters  appoint* 
by  said  United  States  Circuit  Court— to  wit,  MATTHEW  ] 
PLEASANTS,  THOMAS  S.  ATKINS  and  CHARLES  PRICE — I 
deed  bearing  date  the  i8th  day  of  June,  1894,  in  pursuam 
of  the  said  decree  of  said  Court  and  of  other  Courts  in  sa 
deed  mentioned  did  make  conveyance  of  the  said  railroad  ar 
other  property  and  franchises  so  purchased,  more  fully  d 
scribed  in  said  deed,  reference  being  hereby  made  to  the  san 
and  to  the  record  thereof  this  day  made  in  the  Chancery  Cou 
of  the  City  of  Richmond,  in  the  State  of  Virginia,  as  fully  < 
though  the  same  were  incorporated  at  length  herein. 

And  the  undersigned,  whose  names  are  also  hereto  sul 
scribed — to  wit,  SAMUEL  SPENCER,  ALEXANDER  B.  ANDREW 
FRANCIS  LYNDE  STETSON  and  WILLIAM  A.  C.  EWEN  (her 
inafter  called  ASSOCIATES)  —  whom  such  purchasers  ha\ 
associated  with  them  in  this  organization  of  a  new  corporatic 
pursuant  to  Section  2  of  the  Act  of  Assembly  of  the  Commoi 
wealth  of  Virginia  next  hereinafter  mentioned, 

Bo  fjetebg  certify,  In  accordance  with  the  statutes  of  tl 
State  of  Virginia  in  such  case  made  and  provided,  and  esp 
daily  in  accordance  with  Section  i  of  the  Act  of  Assembly  c 
the  Commonwealth  of  Virginia  entitled  "  An  Act  authorizir 
the  purchasers  of  the  Richmond  and  Danville  Railroad,  the 
assigns  and  successors,  to  become  and  be  a  corporation, 
adopt  a  name  therefor,  and  to  possess  and  exercise  gener 
powers  ;  and  authorizing  the  leasing  to  or  by,  and  the  conso 
dation  therewith  of.  other  corporations,17  approved  Februa 
20,  1894,  of  which  a  copy  marked  "  Schedule  A"  is  hereun 
annexed  and  made  a  part  of  this  declaration. 

FIRST.  That  the  Purchasers  and  their  Associates  ha 
elected  to  become  a  corporation  under  the  said  Act  under  tl 
name  of  «  SOUTHERN  RAILWAY  COMPANY." 

SECOND.     That  the  purposes  of  said  corporation  shall  1 


APPENDIX 

to  have,  hold,  enjoy,  possess  and  exercise  the  said  railroad, 
property  and  franchises  of  The  Richmond  and  Danville  Rail- 
road Company  which  passed  to  the  Purchasers  at  the  sale 
hereinbefore  recited,  and  be  invested  with  all  the  estate,  right, 
title  and  interest  in  and  to  such  railroad  and  other  property 
with  their  appurtenances  and  all  the  franchises,  rights  and 
privileges  thereto  pertaining ;  and  generally,  and  from  time  to 
time,  to  have,  hold,  enjoy,  possess  and  exercise  any  and  all 
of  the  rights,  powers,  privileges  and  franchises  conferred  by 
the  said  Act  of  the  Assembly  of  the  Commonwealth  of  Vir- 
ginia, approved  February  20,  1894,  or  by  any  other  act  or 
law  of  which  it  may  lawfully  claim  the  benefit. 

THIRD.  That  the  capital  stock  of  the  Southern  Railway 
Company  shall  be  one  hundred  and  eighty  million  dollars 
($180,000.000),  divided  into  shares  of  the  par  value  of  one 
hundred  dollars  ($100)  each,  of  which  shares  six  hundred 
thousand  (600,000)  shall  be  preferred  shares,  and  the  remainder 
shall  be  common  shares ;  provided,  however,  that  from  time 
to  time  hereafter,  as  provided  in  the  said  Act  of  Assembly  of 
the  Commonwealth  of  Virginia,  such  capital  stock  and  the 
several  classes  thereof  may  be  increased  up  to  but  not  exceed- 
ing the  limit  prescribed  by  the  said  Act. 

FOURTH.  That  the  Southern  Railway  Company  from  time 
to  time  may  issue  bonds  to  the  amount  of  one  hundred  and 
twenty  million  dollars  ($120,000,000),  secured  by  a  mortgage 
or  mortgages  of  the  property  and  franchises  of  the  Railway 
Company,  in  addition  to  prior  liens  thereon,  assumed,  extended 
or  renewed,  or  any  substitutions  therefor,  and  subject  to  further 
increase  as  provided  by  the  said  Act  of  Assembly. 

FIFTH.  That  such  capital  stock  and  bonds  shall,  so  far  as 
necessary,  be  delivered  from  time  to  time  hereafter  in  settle- 
ment for  the  purchase  of  property  in  conformity  with  the  plan 
and  agreement  of  reorganization  under  which  the  railroads, 
property  and  franchises  have  been  or  shall  be  bought  by  the 
said  Purchasing  Committee  or  Company. 

SIXTH.  That  the  first  Board  of  Directors  shall  consist  of 
five  members,  who  shall  hold  office  until  the  first  meeting  of 
277 


RAILWAY   LEGISLATION 

the  stockholders  of  the  Company  to  be  held,  and  the  names 
of  such  Board  of  Directors  shall  be 

SAMUEL  SPENCER, 
CHARLES  H.  COSTER, 
ALEXANDER  B.  ANDREWS, 
FRANCIS  LYNDE  STETSON, 
WILLIAM  A.  C.  EWEN, 

and  the  name  of  the  President  shall  be  SAMUEL  SPENCER. 

2lnb  t0  foritne08  the  acceptance  of  the  before-mentioned  Act 
of  Assembly  by  the  said  Purchasers  and  their  Associates  they 
have  signed  and  sealed  these  Presents,  and  have  caused  the 
same  to  be  filed  and  recorded  in  the  office  of  the  Secretary  of 
the  Commonwealth  and  Keeper  of  the  Seals  of  the  State  of 
Virginia,  and  in  the  Chancery  Court  of  the  City  of  Richmond, 
in  the  State  of  Virginia,  this  eighteenth  day  of  June,  1894. 


Witness:  ^Purchasers. 


Associates. 
STATE  OF  VIRGINIA, 


CITY  OF  RICHMOND,  f  Si 

Before  me,  the  undersigned 

a  Notary  Public,  personally  appeared  in  my  city  aforesaid 
CHARLES  H.  COSTER,  ANTHONY  J.  THOMAS,  SAMUEL  SPENCER, 
ALEXANDER  B.  ANDREWS,  FRANCIS  LYNDE  STETSON  and 
WILLIAM  A.  C.  EWEN,  the  parties  named  in  the  foregoing 
writing  bearing  date  on  the  i8th  day  of  June,  1894,  and  acknowl- 
edged the  same  to  be  their  act  and  deed,  to  the  end  that  the 
same  might  be  recorded  as  such. 

Given  under  my  hand  and  official  seal  this  eighteenth  day 
of  June,  in  the  year  one  thousand  eight  hundred  and  ninety- 
four. 

Notary  Public. 

278 


APPENDIX    III 


THE   MASSACHUSETTS   COMMISSION   LAW 


OF  RAILROAD   CORPORATIONS  AND   RAILROADS 
PUBLIC  STATUTES,  CHAPTER  112 

(The  following  Sections  of  this  Chapter  apply  also  to  Street 
Railway  Companies  and  Street  Railways.) 


MATTERS  OF  CONSTRUCTION 
SECTION 
i.  Definition  of  words  and  phrases. 

BOARD    OF    RAILROAD    COM- 
MISSIONERS 

9.  Railroad  commissioners  and 
clerk.  Appointment,  tenure 
of  office,  etc. 

10.  Salaries,  expenses,  etc. 

(Sts.  1885,  c.  rig;  i8go,  c.  200.) 

11.  Accountant. 

(Sts.  1885,  c>  l(>4  :  lS85>  c>  224-} 

12.  Salaries    and    expenses,    how 

borne  and  apportioned. 

General  Powers  and  Duties  of 
Board 

13.  Board  to  make  annual  report. 

14.  to  have  supervision  of  rail- 

roads, etc. 

15.  to  see  that  laws  are  complied 

with. 

16.  to    inform    corporations    of 

necessary     improvements, 
changes,  etc. 


SECTION 


Board  to  examine  condition 
of  road  on  complaint  of 
city  or  town  authorities, 
etc. 

to  investigate  causes  of  acci- 
dents. 

to  be  furnished  with  infor- 
mation as  to  condition, 
management,  etc.,  of  roads. 

advice  of,  not  to  impair  cor- 
porate duties  and  obliga- 
tions. 

to  examine  books,  accounts, 
etc. 

on  request,  etc.,  to  ascertain 
and  publish  financial  con- 
dition. 

to  have  access  to  list  of  stock- 
holders, etc. 
Penalty  for  refusal  to  submit 

books,  etc. 

Board  may  summon  witnesses. 
Attendance,  how  com- 
pelled, etc. 


279 


RAILWAY   LEGISLATION 


MATTERS  OF  CONSTRUCTION 

SECTION  i.  In  the  construction  of  this  and  the  following 
chapter,  unless  such  meaning  would  be  repugnant  to  the  con- 
text or  to  the  manifest  intention  of  the  general  court,  the 
phrase  "  railroads  and  railways  "  shall  include  all  railroads  and 
railways  in  this  commonwealth,  except  tramways  in  mines  and 
marine  railways,  whether  operated  by  steam  or  by  animal 
power,  and  whether  operated  by  the  corporations  owning  them 
or  by  other  corporations  or  otherwise ;  "  railroad  "  shall  mean 
a  railroad  or  railway  usually  operated  by  steam  power ;  "  street 
railway  "  shall  mean  a  railroad  or  railway  usually  operated  by 
animal  power ;  "  railroad  corporation "  and  "  railroad  com- 
pany "  shall  mean  the  corporation  which  lays  out,  constructs, 
maintains,  or  operates  a  railroad  operated  by  steam  power ; 
"  street  railway  company  "  shall  mean  a  corporation  by  which 
a  street  railway  is  constructed,  maintained,  or  operated ;  "  the 
board  "  shall  mean  the  board  of  railroad  commissioners. 

BOARD   OF   RAILROAD   COMMISSIONERS 

SECTION  9.  There  shall  be  a  board  of  railroad  commis- 
sioners, consisting  of  three  competent  persons.  The  governor 
with  the  advice  and  consent  of  the  council  shall,  before  the 
first  day  of  July  in  each  year,  appoint  a  commissioner,  to  con- 
tinue in  office  for  the  term  of  three  years  from  said  day ;  and 
if  a  vacancy  happens,  he  shall  in  the  same  manner  appoint  a 
commissioner  for  the  residue  of  the  term,  and  may  in  the 
same  manner  remove  any  commissioner.  Said  board  shall 
have  a  clerk,  to  be  appointed  by  the  governor,  who  shall  keep 
a  full  and  faithful  record  of  its  proceedings,;  and  serve  such 
notices  as  the  commissioners  may  require.  The  commis- 
sioners and  clerk  shall  be  sworn  before  entering  upon  the 
discharge  of  their  duties.  No  person  in  the  employment  of 
or  owning  stock  in  a  railroad  corporation  shall  hold  either 
of  said  offices.  No  such  commissioner  or  clerk  shall  person- 
ally, or  through  a  partner  or  agent,  render  any  professional 
service  or  make  or  perform  any  business  contract  with  or  for 

280 


APPENDIX 

a  railroad  corporation  chartered  under  the  laws  of  this  com- 
monwealth, excepting  contracts  made  with  them  as  common 
carriers,  nor  shall  he  directly  or  indirectly  receive  a  com- 
mission, bonus,  discount,  present,  or  reward  from  any  such 
corporation. 

SECTION  10.  The  annual  salary  of  the  chairman  of  the 
board  shall  be  four  thousand  dollars,  that  of  the  other  com- 
missioners three  thousand  five  hundred  dollars  each,  and  that 
of  their  clerk  [two  thousand]  twenty -five  hundred  dollars, 
payable  [quarterly]  monthly  on  the  first  day  of  each  month 
from  the  treasury  of  the  commonwealth.  The  commissioners 
shall  be  provided  with  an  office  in  the  state  house,  or  in  some 
other  suitable  place  in  the  city  of  Boston,  in  which  their 
records  shall  be  kept.  In  the  discharge  of  their  official  duties, 
they  shall  be  transported  over  the  several  railroads  and  rail- 
ways in  the  commonwealth  free  of  charge,  and  may  employ 
and  take  with  them  experts  or  other  agents,  whose  services 
they  deem  to  be  temporarily  of  importance.  The  board  may 
expend  a  sum  not  exceeding  [five  hundred]  two  thousand 
dollars  annually  in  procuring  necessary  books,  maps,  statistics 
and  stationery,  and  in  defraying  expenses  incidental  and  nec- 
essary to  the  discharge  of  its  duties,  and  a  sum  not  exceeding 
[two  thousand]  twenty-five  hundred  dollars  annually  in  de- 
fraying the  compensation  of  an  accountant,  payable  [quarterly] 
monthly  on  the  first  day  of  each  month.  A  statement  of  such 
expenditures  shall  accompany  its  annual  report. 

Acts  of  1885,  Chapter  119. 

An  Act  to  establish  the  Salary  of  the  Clerk  of  the  Board  of  Railroad 
Commissioners. 

SECTION  i .  The  annual  salary  of  the  clerk  of  the  board  of 
railroad  commissioners  shall  be  twenty-five  hundred  dollars 
from  the  first  day  of  January  in  the  year  eighteen  hundred 
and  eighty-five. 

SECTION  2.  So  much  of  section  ten  of  chapter  one  hundred 
and  twelve  of  the  Public  Statutes  as  is  inconsistent  with  this 
act  is  hereby  repealed. 

281 


RAILWAY   LEGISLATION 

SECTION  3.  This  act  shall  take  effect  upon  its  passage. 
[Approved  April  /,  1885. 

Acts  of  1890,  Chapter  200. 
An  Act  relating  to  the  Board  of  Railroad  Commissioners. 

SECTION  i.  The  board  of  railroad  commissioners  is  hereby 
authorized  to  expend  a  sum  not  exceeding  two  thousand 
dollars  annually  in  procuring  necessary  books,  maps,  statistics 
and  stationery,  and  in  defraying  expenses  incidental  and  nec- 
essary to  the  discharge  of  its  duties.  A  statement  of  such 
expenditures  shall  accompany  its  annual  report. 

SECTION  2.  So  much  of  section  ten  of  chapter  one  hundred 
and  twelve  of  the  Public  Statutes  as  is  inconsistent  with  this 
act  is  hereby  repealed. 

SECTION  3.  The  provisions  of  section  twelve  of  chapter 
one  hundred  and  twelve  of  the  Public  Statutes  shall  apply  to 
the  expenses  authorized  by  this  act. 

SECTION  4.  This  act  shall  take  effect  upon  its  passage. 
[Approved  April  21,  1890. 

SECTION  1 1 .  The  board  may  employ  an  accountant  skilled 
in  the  methods  of  railroad  accounting,  who  shall,  under  its 
direction,  supervise  the  method  by  which  the  accounts  of  cor- 
porations operating  railroads  or  street  railways  are  kept. 

Acts  of  1885,  Chapter  164. 

An  Act  concerning  the  Compensation  of  the  Accountant  of  the  Board 
of  Railroad  Commissioners. 

SECTION  i.  The  board  of  railroad  commissioners  may 
allow  as  compensation  to  the  accountant,  authorized  by  section 
eleven  of  chapter  one  hundred  and  twelve  of  the  Public 
Statutes,  a  sum  not  exceeding  twenty-five  hundred  dollars  per 
year. 

SECTION  2.  So  much  of  section  ten  of  said  chapter  one 
hundred  and  twelve  as  is  inconsistent  with  this  act  is  hereby 
repealed. 

SECTION  3.  This  act  shall  take  effect  upon  its  passage. 
[Approved  April  14,  1885. 

282 


APPENDIX 


Acts  of  1885,  Chapter  224. 

An  Act  in  relation  to  the  payment  of  the  Salaries  of  the  Board  of 
Railroad  Commissioners,  of  the  Clerk  and  the  Accountant  of  said 
Board,  and  of  the  Inspector  and  Assayer  of  Liquors. 

SECTION  i .  The  salaries  of  the  board  of  railroad  commis- 
sioners, and  of  the  clerk  and  the  accountant  of  said  board, 
and  the  salary  of  the  inspector  and  assayer  of  liquors,  shall  be 
paid  monthly  on  the  first  day  of  each  month. 

SECTION  2.  So  much  of  section  ten  of  chapter  one  hundred 
and  twelve  of  the  Public  Statutes,  and  so  much  of  section 
twenty-nine  of  chapter  one  hundred  of  the  Public  Statutes,  as 
require  the  payment  quarterly  of  the  salaries  of  the  officers 
named  in  section  one  of  this  act,  are  hereby  repealed. 

SECTION  3.  This  act  shall  take  effect  upon  its  passage. 
^Approved  May  12,  1883. 

SECTION  12.  The  annual  expenses  of  the  board,  including 
the  salaries  of  the  commissioners  and  clerk  and  the  compen- 
sation of  the  accountant,  shall  be  borne  by  the  several  cor- 
porations owning  or  operating  railroads  or  street  railways, 
according  to  their  gross  earnings  by  the  transportation  of 
persons  and  property,  and  shall  be  apportioned  by  the  tax 
commissioner,  who,  on  or  before  the  first  day  of  July  in  each 
year,  shall  assess  upon  each  of  said  corporations  its  just  pro- 
portion of  such  expenses,  in  proportion  to  its  said  earnings 
for  the  year  next  preceding  that  in  which  the  assessment  is 
made ;  and  such  assessments  shall  be  collected  in  the  manner 
provided  by  law  for  the  collection  of  taxes  upon  corporations. 

General  Powers  and  Duties  of  the  Board. 

SECTION  13.  The  board  shall  make  an  annual  report  of 
its  doings  to  the  general  court,  including  such  statements, 
facts,  and  explanations  as  will  disclose  the  actual  working  of 
the  system  of  railroad  transportation  in  its  bearing  upon  the 
business  and  prosperity  of  the  commonwealth,  and  such  sug- 
gestions as  to  its  general  railroad  policy,  or  any  part  thereof, 
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RAILWAY   LEGISLATION 

or  the  condition,  affairs,  or  conduct  of  any  railroad  corpora- 
tion, as  may  seem  to  it  appropriate. 

SECTION  14.  The  board  shall  have  the  general  supervision 
of  all  railroads  and  railways,  and  shall  examine  the  same ;  and 
the  commissioners  shall  keep  themselves  informed  as  to  the 
condition  of  railroads  and  railways  and  the  manner  in  which 
they  are  operated  with  reference  to  the  security  and  accommo- 
dation of  the  public,  and  as  to  the  compliance  of  the  several 
corporations  with  their  charters  and  the  laws  of  the  common- 
wealth. The  provisions  of  the  six  following  sections  shall 
apply  to  all  railroads  and  railways,  and  to  the  corporations, 
trustees,  or  others  owning  or  operating  the  same. 

SECTION  15.  The  board,  whenever  in  its  judgment  any 
such  corporation  has  violated  a  law,  or  neglects  in  any  respect 
to  comply  with  the  terms  of  the  act  by  which  it  was  created 
or  with  the  provisions  of  any  law  of  the  commonwealth,  shall 
give  notice  thereof  in  writing  to  such  corporation  ;  and,  if  the 
violation  or  neglect  is  continued  after  such  notice,  shall  forth- 
with present  the  facts  to  the  attorney-general,  who  shall  take 
such  proceedings  thereon  as  he  may  deem  expedient. 

SECTION  16.  The  board,  whenever  it  deems  that  repairs 
are  necessary  upon  any  railroad,  or  that  an  addition  to  its 
rolling  stock,  or  an  addition  to  or  change  of  its  stations  or 
station-houses,  or  a  change  in  its  rates  of  fares  for  transport- 
ing freight  or  passengers  or  in  the  mode  of  operating  its  road 
and  conducting  its  business,  is  reasonable  and  expedient  in 
order  to  promote  the  security,  convenience,  and  accommodation 
of  the  public,  shall  in  writing  inform  the  corporation  of  the 
improvements  and  changes  which  it  considers  to  be  proper ; 
and  a  report  of  the  proceedings  shall  be  included  in  the  annual 
report  of  the  board. 

SECTION  17.  Upon  the  complaint  and  application  of  the 
mayor  and  aldermen  of  a  city  or  the  selectmen  of  a  town 
within  which  a  part  of  any  railroad  is  located,  the  board  shall 
examine  the  condition  and  operation  thereof;  and  if  twenty 
or  more  legal  voters  in  a  city  or  town,  by  petition  in  writing, 
request  the  mayor  and  aldermen  or  selectmen  to  make  such 

284 


APPENDIX 

complaint  and  application,  and  they  decline  so  to  do,  they 
shall  indorse  upon  the  petition  the  reason  of  such  non-com- 
pliance and  return  it  to  the  petitioners,  who  may  within  ten 
days  thereafter  present  it  to  said  board ;  and  the  board  may 
thereupon  proceed  to  make  such  examination  in  the  same 
manner  as  if  called  upon  by  the  mayor  and  aldermen  or  the 
selectmen,  first  giving  to  the  petitioners  and  to  the  corporation 
reasonable  notice  in  writing  of  the  time  and  place  of  entering 
upon  the  same.  If  upon  such  examination  it  appears  to  the 
board  that  the  complaint  is  well  founded,  it  shall  so  adjudge, 
and  shall  inform  the  corporation  operating  such  railroad  of 
its  adjudication  in  the  same  manner  as  is  provided  in  the  pre- 
ceding section. 

SECTION  18.  The  board  shall  investigate  the  causes  of  any 
accident  on  a  railroad  resulting  in  loss  of  life ;  and  of  any 
accident,  not  so  resulting,  which  it  may  deem  to  require  inves- 
tigation. 

SECTION  19.  Every  railroad  corporation  shall  at  all  times, 
on  request,  furnish  to  the  board  any  information  required  by 
it  concerning  the  condition,  management,  and  operation  of 
the  road  of  such  corporation,  and  particularly  copies  of  all 
leases,  contracts,  and  agreements  for  transportation  with  ex- 
press companies  or  otherwise  to  which  it  is  a  party,  and  also 
with  the  rates  for  transporting  freight  and  passengers  upon 
its  road  and  other  roads  with  which  its  business  is  connected. 

SECTION  20.  No  request  or  advice  of  the  board  shall  im- 
pair in  any  manner  the  legal  duties  and  obligations  of  a  rail- 
road corporation,  or  its  legal  liability  for  the  consequences  of 
its  acts,  or  of  the  neglect  or  mismanagement  of  any  of  its 
agents  or  servants. 

SECTION  21.  The  board  shall  from  time  to  time  in  each 
year  examine  the  books  and  accounts  of  all  corporations 
operating  railroads  or  street  railways,  to  see  that  they  are  kept 
in  a  uniform  manner  and  upon  the  system  prescribed  by  the 
board.  Statements  of  the  doings  and  financial  condition  of 
the  several  corporations  shall  be  prepared  and  published  at 
such  times  as  the  board  shall  deem  expedient. 

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RAILWAY   LEGISLATION 

SECTION  22.  On  the  application  in  writing  of  a  director,  or 
of  any  person  or  persons  owning  one-fiftieth  part  of  the  paid-in 
capital  stock  of  a  corporation  operating  a  railroad  or  street 
railway,  or  owning  the  bonds  or  other  evidences  of  indebted- 
ness of  such  corporation  equal  in  amount  to  one-fiftieth  part 
of  its  paid-in  capital  stock,  the  board  shall  examine  the  books 
and  the  financial  condition  of  said  corporation,  and  shall 
cause  the  result  of  such  examination  to  be  published  in  one 
or  more  daily  papers  in  the  city  of  Boston. 

SECTION  23.  The  board  shall  at  all  times  have  access  to 
the  list  of  stockholders  of  every  corporation  operating  a  rail- 
road or  street  railway,  and  may  at  any  time  cause  the  same 
to  be  copied,  in  whole  or  in  part,  for  the  information  of  the 
board  or  of  persons  owning  stock  in  such  corporation. 

SECTION  24.  A  corporation  refusing  to  submit  its  books 
to  the  examination  of  the  board,  or  neglecting  to  keep  its 
accounts  in  the  method  prescribed  by  the  board,  shall  be 
liable  to  the  penalties  provided  in  section  eighty-four,  in  the 
case  of  the  neglect  or  refusal  to  make  a  report  or  return. 

SECTION  25.  Either  of  the  said  commissioners,  in  all  cases 
investigated  by  the  board,  may  summon  witnesses  in  behalf 
of  the  commonwealth,  and  may  administer  oaths  and  take 
testimony.  The  fees  of  such  witnesses  for  attendance  and 
travel  shall  be  the  same  as  for  witnesses  before  the  superior 
court,  and  shall  be  paid  from  the  treasury  of  the  common- 
wealth, and  a  certificate  of  the  board  shall  be  filed  with  the 
auditor ;  and  any  justice  of  the  superior  court,  either  in  term 
time  or  vacation,  upon  application  of  the  board,  may  in  his 
discretion  compel  the  attendance  of  such  witnesses  and  the 
giving  of  testimony  before  the  board  in  the  same  manner  and 
to  the  same  extent  as  before  said  court. 

For  additional  Powers  and  Duties  of  the  Board  affecting 
Street  Railways,  see 

St.  1887,  c.  413,  §  8  ;        St.  1891,  c.  216;  St.  1894,  c.  462  ; 

St.  1888,  c.  278  ;  St.  1892,  c.  228;  St.  1894,  c.  472; 

St.  1889,  c.  316  ;  St.  1893,  c.  315  ;  St.  1894,  c.  306  ; 

St.  1890,  c.  326  ;  St.  1894,  c.  383;  St.  1894,  c.  543. 

286 


APPENDIX    IV 

THE   INTERSTATE   COMMERCE   LAW 
THE   ACT   TO   REGULATE   COMMERCE 


Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled.  That 
the  provisions  of  this  act  shall  apply  to  any  common  carrier 
or  carriers  engaged  in  the  transportation  of  passengers  or 
property  wholly  by  railroad,  or  partly  by  railroad  and  partly 
by  water  when  both  are  used,  under  a  common  control, 
management,  or  arrangement,  for  a  continuous  carriage  or 
shipment,  from  one  State  or  Territory  of  the  United  States, 
or  the  District  of  Columbia,  to  any  other  State  or  Territory 
of  the  United  States,  or  the  District  of  Columbia,  or  from  any 
place  in  the  United  States  to  an  adjacent  foreign  country,  or 
from  any  place  in  the  United  States  through  a  foreign  country 
to  any  other  place  in  the  United  States,  and  also  to  the  trans- 
portation in  like  manner  of  property  shipped  from  any  place  in 
the  United  States  to  a  foreign  country  and  carried  from  such 
place  to  a  port  of  transshipment,  or  shipped  from  a  foreign 
country  to  any  place  in  the  United  States  and  carried  to  such 
place  from  a  port  of  entry  either  in  the  United  States  or  an 
adjacent  foreign  country:  Provided,  however,  That  the  pro- 
visions of  this  act  shall  not  apply  to  the  transportation  of 
passengers  or  property,  or  to  the  receiving,  delivering,  stor- 
age, or  handling  of  property,  wholly  within  one  State,  and 
not  shipped  to  or  from  a  foreign  country  from  or  to  any  State 
or  Territory  as  aforesaid. 

287 


RAILWAY   LEGISLATION 

The  term  "railroad"  as  used  in  this  act  shall  include  all 
bridges  and  ferries  used  or  operated  in  connection  with  any 
railroad,  and  also  all  the  road  in  use  by  any  corporation 
operating  a  railroad,  whether  owned  or  operated  under  a 
contract,  agreement,  or  lease ;  and  the  term  "  transportation  " 
shall  include  all  instrumentalities  of  shipment  or  carriage. 

All  charges  made  for  any  service  rendered  or  to  be  rendered 
in  the  transportation  of  passengers  or  property  as  aforesaid, 
or  in  connection  therewith,  or  for  the  receiving,  delivering, 
storage,  or  handling  of  such  property,  shall  be  reasonable 
and  just;  and  every  unjust  and  unreasonable  charge  for 
such  service  is  prohibited  and  declared  to  be  unlawful. 

SEC.  2.  That  if  any  common  carrier  subject  to  the  provi- 
sions of  this  act  shall,  directly  or  indirectly,  by  any  special 
rate,  rebate,  drawback,  or  other  device,  charge,  demand,  col- 
lect, or  receive  from  any  person  or  persons  a  greater  or  less 
compensation  for  any  service  rendered,  or  to  be  rendered,  in 
the  transportation  of  passengers  or  property,  subject  to  the 
provisions  of  this  act,  than  it  charges,  demands,  collects,  or 
receives  from  any  other  person  or  persons  for  doing  for  him 
or  them  a  like  and  contemporaneous  service  in  the  transporta- 
tion of  a  like  kind  of  traffic  under  substantially  similar  circum- 
stances and  conditions,  such  common  carrier  shall  be  deemed 
guilty  of  unjust  discrimination,  which  is  hereby  prohibited  and 
declared  to  be  unlawful. 

SEC.  3.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  make  or  give  any 
undue  or  unreasonable  preference  or  advantage  to  any  par- 
ticular person,  company,  firm,  corporation,  or  locality,  or  any 
particular  description  of  traffic,  in  any  respect  whatsoever, 
or  to  subject  any  particular  person,  company,  firm,  corpora- 
tion, or  locality,  or  any  particular  description  of  traffic,  to 
any  undue  or  unreasonable  prejudice  or  disadvantage  in  any 
respect  whatsoever. 

Every  common  carrier  subject  to  the  provisions  of  this  act 
shall,  according  to  their  respective  powers,  afford  all  reason- 
able, proper,  and  equal  facilities  for  the  interchange  of  traffic 
288 


APPENDIX 

between  their  respective  lines,  and  for  the  receiving,  forward- 
ing, and  delivering  of  passengers  and  property  to  and  from 
their  several  lines  and  those  connecting  therewith,  and  shall 
not  discriminate  in  their  rates  and  charges  between  such  con- 
necting lines  ;  but  this  shall  not  be  construed  as  requiring  any 
such  common  carrier  to  give  the  use  of  its  tracks  or  terminal 
facilities  to  another  carrier  engaged  in  like  business. 

SEC.  4.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  charge  or  receive  any 
greater  compensation  in  the  aggregate  for  the  transportation 
of  passengers  or  of  like  kind  of  property,  under  substantially 
similar  circumstances  and  conditions,  for  a  shorter  than  for  a 
longer  distance  over  the  same  line,  in  the  same  direction,  the 
shorter  being  included  within  the  longer  distance;  but  this 
shall  not  be  construed  as  authorizing  any  common  carrier 
within  the  terms  of  this  act  to  charge  and  receive  as  great 
compensation  for  a  shorter  as  for  a  longer  distance :  Provided, 
however,  That  upon  application  to  the  Commission  appointed 
under  the  provisions  of  this  act,  such  common  carrier  may, 
in  special  cases,  after  investigation  by  the  Commission,  be 
authorized  to  charge  less  for  longer  than  for  shorter  dis- 
tances for  the  transportation  of  passengers  or  property ;  and 
the  Commission  may  from  time  to  time  prescribe  the  extent 
to  which  such  designated  common  carrier  may  be  relieved 
from  the  operation  of  this  section  of  this  act. 

SEC.  5.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  enter  into  any  contract, 
agreement,  or  combination  with  any  other  common  carrier  or 
carriers  for  the  pooling  of  freights  of  different  and  competing 
railroads,  or  to  divide  between  them  the  aggregate  or  net  pro- 
ceeds of  the  earnings  of  such  railroads,  or  any  portion  there- 
of; and  in  any  case  of  an  agreement  for  the  pooling  of  freights 
as  aforesaid,  each  day  of  its  continuance  shall  be  deemed  a 
separate  offence. 

SEC.  6.  (As  amended  March  2y  1889.)  That  every  common 
carrier  subject  to  the  provisions  of  this  act  shall  print  and 
keep  open  to  public  inspection  schedules  showing  the  rates 
u  289 


RAILWAY   LEGISLATION 

and  fares  and  charges  for  the  transportation  of  passengers 
and  property  which  any  such  common  carrier  has  estab- 
lished and  which  are  in  force  at  the  time  upon  its  route. 
The  schedules  printed  as  aforesaid  by  any  such  common 
carrier  shall  plainly  state  the  places  upon  its  railroad  between 
which  property  and  passengers  will  be  carried,  and  shall  con- 
tain the  classification  of  freight  in  force,  and  shall  also  state 
separately  the  terminal  charges  and  any  rules  or  regulations 
which  in  any  wise  change,  affect,  or  determine  any  part  or  the 
aggregate  of  such  aforesaid  rates  and  fares  and  charges.  Such 
schedules  shall  be  plainly  printed  in  large  type,  and  copies  for 
the  use  of  the  public  shall  be  posted  in  two  public  and  con- 
spicuous places,  in  every  depot,  station,  or  office  of  such 
carrier  where  passengers  or  freight,  respectively,  are  received 
for  transportation,  in  such  form  that  they  shall  be  accessible 
to  the  public  and  can  be  conveniently  inspected. 

Any  common  carrier  subject  to  the  provisions  of  this  act 
receiving  freight  in  the  United  States  to  be  carried  through 
a  foreign  country  to  any  place  in  the  United  States  shall  also 
in  like  manner  print  and  keep  open  to  public  inspection,  at 
every  depot  or  office  where  such  freight  is  received  for  ship- 
ment, schedules  showing  the  through  rates  established  and 
charged  by  such  common  carrier  to  all  points  in  the  United 
States  beyond  the  foreign  country  to  which  it  accepts  freight 
for  shipment ;  and  any  freight  shipped  from  the  United  States 
through  a  foreign  country  into  the  United  States,  the  through 
rate  on  which  shall  not  have  been  made  public  as  required  by 
this  act,  shall,  before  it  is  admitted  into  the  United  States 
from  said  foreign  country,  be  subject  to  customs  duties  as  if 
said  freight  were  of  foreign  production ;  and  any  law  in  con- 
flict with  this  section  is  hereby  repealed. 

No  advance  shall  be  made  in  the  rates,  fares,  and  charges 
which  have  been  established  and  published  as  aforesaid  by 
any  common  carrier  in  compliance  with  the  requirements  of 
this  section,  except  after  ten  days'  public  notice,  which  shall 
plainly  state  the  changes  proposed  to  be  made  in  the  schedule 
then  in  force,  and  the  time  when  the  increased  rates,  fares,  or 
290 


APPENDIX 

charges  will  go  into  effect ;  and  the  proposed  changes  shall  be 
shown  by  printing  new  schedules,  or  shall  be  plainly  indicated 
upon  the  schedules  in  force  at  the  time  and  kept  open  to 
public  inspection.  Reductions  in  such  published  rates,  fares, 
or  charges  shall  only  be  made  after  three  days1  previous  public 
notice,  to  be  given  in  the  same  manner  that  notice  of  an  ad- 
vance in  rates  must  be  given. 

And  when  any  such  common  carrier  shall  have  established 
and  published  its  rates,  fares,  and  charges  in  compliance  with 
the  provisions  of  this  section,  it  shall  be  unlawful  for  such 
common  carrier  to  charge,  demand,  collect,  or  receive  from 
any  person  or  persons  a  greater  or  less  compensation  for  the 
transportation  of  passengers  or  property,  or  for  any  services 
in  connection  therewith,  than  is  specified  in  such  published 
schedule  of  rates,  fares,  and  charges  as  may  at  the  time  be  in 
force. 

Every  common  carrier  subject  to  the  provisions  of  this  act 
shall  file  with  the  Commission  hereinafter  provided  for  copies 
of  its  schedules  of  rates,  fares,  and  charges  which  have  been 
established  and  published  in  compliance  with  the  require- 
ments of  this  section,  and  shall  promptly  notify  said  Com- 
mission of  all  changes  made  in  the  same.  Every  such 
common  carrier  shall  also  file  with  said  Commission  copies  of 
all  contracts,  agreements,  or  arrangements  with  other  common 
carriers  in  relation  to  any  traffic  affected  by  the  provisions  of 
this  act  to  which  it  may  be  a  party.  And  in  cases  where 
passengers  and  freight  pass  over  continuous  lines  or  routes 
operated  by  more  than  one  common  carrier,  and  the  several 
common  carriers  operating  such  lines  or  routes  establish  joint 
tariffs  of  rates  or  fares  or  charges  for  such  continuous  lines  or 
routes,  copies  of  such  joint  tariffs  shall  also,  in  like  manner, 
be  filed  with  said  Commission.  Such  joint  rates,  fares,  and 
charges  on  such  continuous  lines  so  filed  as  aforesaid  shall 
be  made  public  by  such  common  carriers  when  directed  by 
said  Commission,  in  so  far  as  may,  in  the  judgment  of  the 
Commission,  be  deemed  practicable ;  and  said  Commission 
shall  from  time  to  time  prescribe  the  measure  of  publicity 
291 


RAILWAY   LEGISLATION 

which  shall  be  given  to  such  rates,  fares,  and  charges,  or  to 
such  part  of  them  as  it  may  deem  it  practicable  for  such 
common  carriers  to  publish,  and  the  places  in  which  they 
shall  be  published. 

No  advance  shall  be  made  in  joint  rates,  fares,  and  charges, 
shown  upon  joint  tariffs,  except  after  ten  days1  notice  to  the 
Commission,  which  shall  plainly  state  the  changes  proposed 
to  be  made  in  the  schedule  then  in  force,  and  the  time  when 
the  increased  rates,  fares,  or  charges  will  go  into  effect.  No 
reduction  shall  be  made  in  joint  rates,  fares,  and  charges, 
except  after  three  days'  notice,  to  be  given  to  the  Commission 
as  is  above  provided  in  the  case  of  an  advance  of  joint  rates. 
The  Commission  may  make  public  such  proposed  advances, 
or  such  reductions,  in  such  manner  as  may,  in  its  judgment, 
be  deemed  practicable,  and  may  prescribe  from  time  to  time 
the  measure  of  publicity  which  common  carriers  shall  give  to 
advances  or  reductions  in  joint  tariffs. 

It  shall  be  unlawful  for  any  common  carrier,  party  to  any 
joint  tariff,  to  charge,  demand,  collect,  or  receive  from  any 
person  or  persons  a  greater  or  less  compensation  for  the  trans- 
portation of  persons  or  property,  or  for  any  services  in  con- 
nection therewith,  between  any  points  as  to  which  a  joint 
rate,  fare,  or  charge  is  named  thereon  than  is  specified  in  the 
schedule  filed  with  the  Commission  in  force  at  the  time. 

The  Commission  may  determine  and  prescribe  the  form  in 
which  the  schedules  required  by  this  section  to  be  kept  open 
to  public  inspection  shall  be  prepared  and  arranged,  and  may 
change  the  form  from  time  to  time  as  shall  be  found  expedient. 

If  any  such  common  carrier  shall  neglect  or  refuse  to  file 
or  publish  its  schedules  or  tariffs  of  rates,  fares,  and  charges 
as  provided  in  this  section,  or  any  part  of  the  same,  such 
common  carrier  shall,  in  addition  to  other  penalties  herein 
prescribed,  be  subject  to  a  writ  of  mandamus,  to  be  issued 
by  any  circuit  court  of  the  United  States  in  the  judicial 
district  wherein  the  principal  office  of  said  common  carrier 
is  situated,  or  wherein  such  offense  may  be  committed,  and 
if  such  common  carrier  be  a  foreign  corporation  in  the  judi- 
292 


APPENDIX 

cial  circuit  wherein  such  common  carrier  accepts  traffic  and 
has  an  agent  to  perform  such  service,  to  compel  compliance 
with  the  aforesaid  provisions  of  this  section ;  and  such  writ 
shall  issue  in  the  name  of  the  people  of  the  United  States,  at 
the  relation  of  the  Commissioners  appointed  under  the  pro- 
visions of  this  act ;  and  the  failure  to  comply  with  its  require- 
ments shall  be  punishable  as  and  for  a  contempt  and  the  said 
Commissioners,  as  complainants,  may  also  apply,  in  any  such 
circuit  court  of  the  United  States,  for  a  writ  of  injunction 
against  such  common  carrier,  to  restrain  such  common  carrier 
from  receiving  or  transporting  property  among  the  several 
States  and  Territories  of  the  United  States,  or  between  the 
United  States  and  adjacent  foreign  countries,  or  between  ports 
of  transshipment  and  of  entry  and  the  several  States  and 
Territories  of  the  United  States,  as  mentioned  in  the  first 
section  of  this  act,  until  such  common  carrier  shall  have  com- 
plied with  the  aforesaid  provisions  of  this  section  of  this  act. 

SEC.  7.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  enter  into  any  com- 
bination, contract,  or  agreement,  expressed  or  implied,  to 
prevent,  by  change  of  time  schedule,  carriage  in  different 
cars,  or  by  other  means  or  devices,  the  carriage  of  freights 
from  being  continuous  from  the  place  of  shipment  to  the 
place  of  destination ;  and  no  break  of  bulk,  stoppage,  or 
interruption  made  by  such  common  carrier  shall  prevent  the 
carriage  of  freights  from  being  and  being  treated  as  one  con- 
tinuous carriage  from  the  place  of  shipment  to  the  place  of 
destination,  unless  such  break,  stoppage,  or  interruption  was 
made  in  good  faith  for  some  necessary  purpose,  and  without 
any  intent  to  avoid  or  unnecessarily  interrupt  such  continuous 
carriage  or  to  evade  any  of  the  provisions  of  this  act. 

SEC.  8.  That  in  case  any  common  carrier  subject  to  the 
provisions  of  this  act  shall  do,  cause  to  be  done,  or  permit 
to  be  done  any  act,  matter,  or  thing  in  this  act  prohibited  or 
declared  to  be  unlawful,  or  shall  omit  to  do  any  act,  matter, 
or  thing  in  this  act  required  to  be  done,  such  common  carrier 
shall  be  liable  to  the  person  or  persons  injured  thereby  for 

293 


RAILWAY   LEGISLATION 

the  full  amount  of  damages  sustained  in  consequence  of  any 
such  violation  of  the  provisions  of  this  act,  together  with  a 
reasonable  counsel  or  attorney's  fee,  to  be  fixed  by  the  court  in 
every  case  of  recovery,  which  attorney's  fee  shall  be  taxed  and 
collected  as  part  of  the  costs  in  the  case. 

SEC.  9.  That  any  person  or  persons  claiming  to  be  damaged 
by  any  common  carrier  subject  to  the  provisions  of  this  act 
may  either  make  complaint  to  the  Commission  as  hereinafter 
provided  for,  or  may  bring  suit  in  his  or  their  own  behalf  for 
the  recovery  of  the  damages  for  which  such  common  carrier 
may  be  liable  under  the  provisions  of  this  act,  in  any  district 
or  circuit  court  of  the  United  States  of  competent  jurisdiction ; 
but  such  person  or  persons  shall  not  have  the  right  to  pursue 
both  of  said  remedies,  and  must  in  each  case  elect  which  one 
of  the  two  methods  of  procedure  herein  provided  for  he  or 
they  will  adopt.  In  any  such  action  brought  for  the  recovery 
of  damages  the  court  before  which  the  same  shall  be  pending 
may  compel  any  director,  officer,  receiver,  trustee,  or  agent  of 
the  corporation  or  company  defendant  in  such  suit  to  attend, 
appear,  and  testify  in  such  case,  and  may  compel  the  produc- 
tion of  the  books  and  papers  of  such  corporation  or  company 
party  to  any  such  suit ;  the  claim  that  any  such  testimony  or 
evidence  may  tend  to  criminate  the  person  giving  such  evi- 
dence shall  not  excuse  such  witness  from  testifying,  but  such 
evidence  or  testimony  shall  not  be  used  against  such  person 
on  the  trial  of  any  criminal  proceeding. 

SEC.  10.  (As  amended  March  2,  1889.)  That  any  common 
carrier  subject  to  the  provisions  of  this  act,  or,  whenever  such 
common  carrier  is  a  corporation,  any  director  or  officer 
thereof,  or  any  receiver,  trustee,  lessee,  agent,  or  person, 
acting  for  or  employed  by  such  corporation,  who,  alone  or 
with  any  other  corporation,  company,  person,  or  party,  shall 
willfully  do  or  cause  to  be  done,  or  shall  willingly  suffer  or 
permit  to  be  done,  any  act,  matter,  or  thing  in  this  act  pro- 
hibited or  declared  to  be  unlawful,  or  who  shall  aid  or  abet 
therein,  or  shall  willfully  omit  or  fail  to  do  any  act,  matter,  or 
thing  in  this  act  required  to  be  done,  or  shall  cause  or  will- 
294 


APPENDIX 

ingly  suffer  or  permit  any  act,  matter,  or  thing  so  directed  or 
required  by  this  act  to  be  done  not  to  be  so  done,  or  shall  aid 
or  abet  any  such  omission  or  failure,  or  shall  be  guilty  of 
any  infraction  of  this  act,  or  shall  aid  or  abet  therein,  shall  be 
deemed  guilty  of  a  misdemeanor,  and  shall,  upon  conviction 
thereof  in  any  district  court  of  the  United  States  within  the 
jurisdiction  of  which  such  offense  was  committed,  be  subject 
to  a  fine  of  not  to  exceed  five  thousand  dollars  for  each 
offense :  Provided,  That  if  the  offense  for  which  any  person 
shall  be  convicted  as  aforesaid  shall  be  an  unlawful  discrimina- 
tion in  rates,  fares,  or  charges,  for  the  transportation  of  passen- 
gers or  property,  such  person  shall,  in  addition  to  the  fine 
hereinbefore  provided  for,  be  liable  to  imprisonment  in  the 
penitentiary  for  a  term  of  not  exceeding  two  years,  or  both 
such  fine  and  imprisonment,  in  the  discretion  of  the  court. 

Any  common  carrier  subject  to  the  provisions  of  this  act, 
or,  whenever  such  common  carrier  is  a  corporation,  any  officer 
or  agent  thereof,  or  any  person  acting  for  or  employed  by 
such  corporation,  who,  by  means  of  false  billing,  false  classifi- 
cation, false  weighing,  or  false  report  of  weight,  or  by  any 
other  device  or  means,  shall  knowingly  and  willfully  assist,  or 
shall  willingly  suffer  or  permit,  any  person  or  persons  to 
obtain  transportation  for  property  at  less  than  the  regular 
rates  then  established  and  in  force  on  the  line  of  transporta- 
tion of  such  common  carrier,  shall  be  deemed  guilty  of  a 
misdemeanor,  and  shall,  upon  conviction  thereof  in  any  court 
of  the  United  States  of  competent  jurisdiction  within  the 
district  in  which  such  offense  was  committed,  be  subject  to  a 
fine  of  not  exceeding  five  thousand  dollars,  or  imprisonment 
in  the  penitentiary  for  a  term  of  not  exceeding  two  years,  or 
both,  in  the  discretion  of  the  court,  for  each  offense. 

Any  person  and  any  officer  or  agent  of  any  corporation  or 
company  who  shall  deliver  property  for  transportation  to  any 
common  carrier,  subject  to  the  provisions  of  this  act,  or  for 
whom  as  consignor  or  consignee  any  such  carrier  shall  trans- 
port property,  who  shall  knowingly  and  willfully,  by  false 
billing,  false  classification,  false  weighing,  false  representation 

295 


RAILWAY   LEGISLATION 

of  the  contents  of  the  package,  or  false  report  of  weight,  or 
by  any  other  device  or  means,  whether  with  or  without  the 
consent  or  connivance  of  the  carrier,  its  agent  or  agents, 
obtain  transportation  for  such  property  at  less  than  the  regular 
rates  then  established  and  in  force  on  the  line  of  transporta- 
tion, shall  be  deemed  guilty  of  fraud,  which  is  hereby  declared 
to  be  a  misdemeanor,  and  shall,  upon  conviction  thereof  in 
any  court  of  the  United  States  of  competent  jurisdiction 
within  the  district  in  which  such  offense  was  committed,  be 
subject  for  each  offense  to  a  fine  of  not  exceeding  five  thou- 
sand dollars  or  imprisonment  in  the  penitentiary  for  a  term  of 
not  exceeding  two  years,  or  both,  in  the  discretion  of  the 
court. 

If  any  such  person,  or  any  officer  or  agent  of  any  such 
corporation  or  company,  shall,  by  payment  of  money  or  other 
thing  of  value,  solicitation,  or  otherwise,  induce  any  common 
carrier  subject  to  the  provisions  of  this  act,  or  any  of  its 
officers  or  agents,  to  discriminate  unjustly  in  his,  its,  or  their 
favor  as  against  any  other  consignor  or  consignee  in  the 
transportation  of  property,  or  shall  aid  or  abet  any  common 
carrier  in  any  such  unjust  discrimination,  such  person  or  such 
officer  or  agent  of  such  corporation  or  company  shall  be 
deemed  guilty  of  a  misdemeanor,  and  shall,  upon  conviction 
thereof  in  any  court  of  the  United  States  of  competent  juris- 
diction within  the  district  in  which  such  offense  was  committed, 
be  subject  to  a  fine  of  not  exceeding  five  thousand  dollars,  or 
imprisonmemt  in  the  penitentiary  for  a  term  of  not  exceeding 
two  years,  or  both,  in  the  discretion  of  the  court,  for  each 
offense ;  and  such  person,  corporation,  or  company  shall  also, 
together  with  said  common  carrier,  be  liable,  jointly  or  sev- 
erally, in  an  action  on  the  case  to  be  brought  by  any  con- 
signor or  consignee  discriminated  against  in  any  court  of  the 
United  States  of  competent  jurisdiction  for  all  damages 
caused  by  or  resulting  therefrom. 

SEC.  1 1 .  That  a  Commission  is  hereby  created  and  estab- 
lished to  be  known  as  the  Inter-State  Commerce  Commission, 
which  shall  be  composed  of  five  Commissioners,  who  shall  be 
296 


APPENDIX 

appointed  by  the  President,  by  and  with  the  advice  and  consent 
of  the  Senate.  The  Commissioners  first  appointed  under  this 
act  shall  continue  in  office  for  the  term  of  two,  three,  four,  five, 
and  six  years,  respectively,  from  the  first  day  of  January,  anno 
Domini  eighteen  hundred  and  eighty-seven,  the  term  of  each 
to  be  designated  by  the  President ;  but  their  successors  shall 
be  appointed  for  terms  of  six  years,  except  that  any  person 
chosen  to  fill  a  vacancy  shall  be  appointed  only  for  the  unex- 
pired  time  of  the  Commissioner  whom  he  shall  succeed.  Any 
Commissioner  may  be  removed  by  the  President  for  ineffi- 
ciency, neglect  of  duty,  or  malfeasance  in  office.  Not  more 
than  three  of  the  Commissioners  shall  be  appointed  from  the 
same  political  party.  No  person  in  the  employ  of  or  holding 
any  official  relation  to  any  common  carrier  subject  to  the  pro- 
visions of  this  act,  or  owning  stock  or  bonds  thereof,  or  who 
is  in  any  manner  pecuniarily  interested  therein,  shall  enter 
upon  the  duties  of  or  hold  such  office.  Said  Commissioners 
shall  not  engage  in  any  other  business,  vocation,  or  employ- 
ment. No  vacancy  in  the  Commission  shall  impair  the  right 
of  the  remaining  Commissioners  to  exercise  all  the  powers  of 
the  Commission. 

"  SEC.  12.  (As  amended  March  2,  1889,  and  February  10, 
1891.)  That  the  Commission  hereby  created  shall  have 
authority  to  inquire  into  the  management  of  the  business  of 
all  common  carriers  subject  to  the  provisions  of  this  act,  and 
shall  keep  itself  informed  as  to  the  manner  and  method  in 
which  the  same  is  conducted,  and  shall  have  the  right  to 
obtain  from  such  common  carriers  full  and  complete  informa- 
tion necessary  to  enable  the  Commission  to  perform  the  duties 
and  carry  out  the  objects  for  which  it  was  created ;  and  the 
Commission  is  hereby  authorized  and  required  to  execute  and 
enforce  the  provisions  of  this  act ;  and,  upon  the  request  of 
the  Commission,  it  shall  be  the  duty  of  any  district  attorney 
of  the  United  States  to  whom  the  Commission  may  apply  to 
institute  in  the  proper  court  and  to  prosecute  under  the  direc- 
tion of  the  Attorney-General  of  the  United  States  all  neces- 
sary proceedings  for  the  enforcement  of  the  provisions  of  this 
297 


RAILWAY   LEGISLATION 

act  and  for  the  punishment  of  all  violations  thereof,  and  the 
costs  and  expenses  of  such  prosecution  shall  be  paid  out  of 
the  appropriation  for  the  expenses  of  the  courts  of  the  United 
States ;  and  for  the  purposes  of  this  act  the  Commission  shall 
have  power  to  require,  by  subpoena,  the  attendance  and  testi- 
mony of  witnesses  and  the  production  of  all  books,  papers, 
tariffs,  contracts,  agreements,  and  documents  relating  to  any 
matter  under  investigation. 

"  Such  attendance  of  witnesses,  and  the  production  of  such 
documentary  evidence,  may  be  required  from  any  place  in  the 
United  States,  at  any  designated  place  of  hearing.  And  in 
case  of  disobedience  to  a  subpoena  the  Commission,  or  any 
party  to  a  proceeding  before  the  Commission,  may  invoke  the 
aid  of  any  court  of  the  United  States  in  requiring  the  attend- 
ance and  testimony  of  witnesses  and  the  production  of  books, 
papers,  and  documents  under  the  provisions  of  this  section. 

"  And  any  of  the  circuit  courts  of  the  United  States  within 
the  jurisdiction  of  which  such  inquiry  is  carried  on  may,  in 
case  of  contumacy  or  refusal  to  obey  a  subpoena  issued  to 
any  common  carrier  subject  to  the  provisions  of  this  act,  or 
other  person,  issue  an  order  requiring  such  common  carrier  or 
other  person  to  appear  before  said  Commission  (and  produce 
books  and  papers  if  so  ordered)  and  give  evidence  touching 
the  matter  in  question ;  and  any  failure  to  obey  such  order  of 
the  court  may  be  punished  by  such  court  as  a  contempt 
thereof.  The  claim  that  any  such  testimony  or  evidence  may 
tend  to  criminate  the  person  giving  such  evidence  shall  not 
excuse  such  witness  from  testifying;  but  such  evidence  or 
testimony  shall  not  be  used  against  such  person  on  the  trial 
of  any  criminal  proceeding. 

"  The  testimony  of  any  witness  may  be  taken,  at  the  instance 
of  a  party  in  any  proceeding  or  investigation  pending 
before  the  Commission,  by  deposition,  at  any  time  after  a 
cause  or  proceeding  is  at  issue  on  petition  and  answer.  The 
Commission  may  also  order  testimony  to  be  taken  by  deposi- 
tion in  any  proceeding  or  investigation  pending  before  it,  at 
any  stage  of  such  proceeding  or  investigation.  Such  deposi- 
298 


APPENDIX 

tions  may  be  taken  before  any  judge  of  any  court  of  the 
United  States,  or  any  commissioner  of  a  circuit,  or  any  clerk 
of  a  district  or  circuit  court,  or  any  chancellor,  justice,  or 
judge  of  a  supreme  or  superior  court,  mayor  or  chief  magis- 
trate of  a  city,  judge  of  a  county  court,  or  court  of  common 
pleas  of  any  of  the  United  States,  or  any  notary  public,  not 
being  of  counsel  or  attorney  to  either  of  the  parties,  nor 
interested  in  the  event  of  the  proceeding  or  investigation. 
Reasonable  notice  must  first  be  given  in  writing  by  the  party 
or  his  attorney  proposing  to  take  such  deposition  to  the 
opposite  party  or  his  attorney  of  record,  as  either  may  be 
nearest,  which  notice  shall  state  the  name  of  the  witness 
and  the  time  and  place  of  the  taking  of  his  deposition.  Any 
person  may  be  compelled  to  appear  and  depose,  and  to  pro- 
duce documentary  evidence,  in  the  same  manner  as  witnesses 
may  be  compelled  to  appear  and  testify  and  produce  docu- 
mentary evidence  before  the  Commission  as  hereinbefore 
provided. 

"Every  person  deposing  as  herein  provided  shall  be 
cautioned  and  sworn  (or  affirm,  if  he  so  request)  to  testify 
the  whole  truth,  and  shall  be  carefully  examined.  His  testi- 
mony shall  be  reduced  to  writing  by  the  magistrate  taking  the 
deposition,  or  under  his  direction,  and  shall,  after  it  has  been 
reduced  to  writing,  be  subscribed  by  the  deponent. 

"  If  a  witness  whose  testimony  may  be  desired  to  be  taken 
by  deposition  be  in  a  foreign  country,  the  deposition  may  be 
taken  before  an  officer  or  person  designated  by  the  Commis- 
sion, or  agreed  upon  by  the  parties  by  stipulation  in  writing 
to  be  filed  with  the  Commission.  All  depositions  must  be 
promptly  filed  with  the  Commission." 

Witnesses  whose  depositions  are  taken  pursuant  to  this 
act,  and  the  magistrate  or  other  officer  taking  the  same,  shall 
severally  be  entitled  to  the  same  fees  as  are  paid  for  like 
services  in  the  courts  of  the  United  States. 

SEC.  13.  That  any  person,  firm,  corporation,  or  association, 
or  any  mercantile,  agricultural,  or  manufacturing  society,  or 
any  body  politic  or  municipal  organization  complaining  of 
299 


RAILWAY   LEGISLATION 

anything  done  or  omitted  to  be  done  by  any  common  carrier 
subject  to  the  provisions  of  this  act  in  contravention  of  the 
provisions  thereof,  may  apply  to  said  Commission  by  petition, 
which  shall  briefly  state  the  facts ;  whereupon  a  statement  of 
the  charges  thus  made  shall  be  forwarded  by  the  Commission 
to  such  common  carrier,  who  shall  be  called  upon  to  satisfy 
the  complaint  or  to  answer  the  same  in  writing  within  a 
reasonable  time,  to  be  specified  by  the  Commission.  If  such 
common  carrier,  within  the  time  specified,  shall  make  repara- 
tion for  the  injury  alleged  to  have  been  done,  said  carrier  shall 
be  relieved  of  liability  to  the  complainant  only  for  the  par- 
ticular violation  of  law  thus  complained  of.  If  such  carrier 
shall  not  satisfy  the  complaint  within  the  time  specified,  or 
there  shall  appear  to  be  any  reasonable  ground  for  investigat- 
ing said  complaint,  it  shall  be  the  duty  of  the  Commission  to 
investigate  the  matters  complained  of  in  such  manner  and  by 
such  means  as  it  shall  deem  proper. 

Said  Commission  shall  in  like  manner  investigate  any 
complaint  forwarded  by  the  railroad  commissioner  or  rail- 
road commission  of  any  State  or  Territory  at  the  request  of 
such  commissioner  or  commission,  and  may  institute  any 
inquiry  on  its  own  motion  in  the  same  manner  and  to  the 
same  effect  as  though  complaint  had  been  made. 

No  complaint  shall  at  any  time  be  dismissed  because  of 
the  absence  of  direct  damage  to  the  complainant. 

SEC.  14.  (As  amended  March  2,  1889.)  That  whenever  an 
investigation  shall  be  made  by  said  Commission,  it  shall  be 
its  duty  to  make  a  report  in  writing  in  respect  thereto,  which 
shall  include  the  findings  of  fact  upon  which  the  conclusions 
of  the  Commission  are  based,  together  with  its  recommenda- 
tion as  to  what  reparation,  if  any,  should  be  made  by  the 
common  carrier  to  any  party  or  parties  who  may  be  found  to 
have  been  injured ;  and  such  findings  so  made  shall  there- 
after, in  all  judicial  proceedings,  be  deemed  prima  facie 
evidence  as  to  each  and  every  fact  found. 

All  reports  of  investigations  made  by  the  Commission  shall 
be  entered  of  record,  and  a  copy  thereof  shall  be  furnished  to 
300 


APPENDIX 

the  party  who  may  have  complained,  and  to  any  common 
carrier  that  may  have  been  complained  of. 

The  Commission  may  provide  for  the  publication  of  its 
reports  and  decisions  in  such  form  and  manner  as  may  be 
best  adapted  for  public  information  and  use,  and  such  author- 
ized publications  shall  be  competent  evidence  of  the  reports 
and  decisions  of  the  Commission  therein  contained,  in  all  courts 
of  the  United  States,  and  of  the  several  States,  without  any 
further  proof  or  authentication  thereof.  The  Commission  may 
also  cause  to  be  printed  for  early  distribution  its  annual  reports. 

SEC.  15.  That  if  in  any  case  in  which  an  investigation 
shall  be  made  by  said  Commission  it  shall  be  made  to  appear 
to  the  satisfaction  of  the  Commission,  either  by  the  testimony 
of  witnesses  or  other  evidence,  that  anything  has  been  done 
or  omitted  to  be  done  in  violation  of  the  provisions  of  this 
act,  or  of  any  law  cognizable  by  said  Commission,  by  any 
common  carrier,  or  that  any  injury  or  damage  has  been  sus- 
tained by  the  party  or  parties  complaining,  or  by  other  parties 
aggrieved  in  consequence  of  any  such  violation,  it  shall  be 
the  duty  of  the  Commission  to  forthwith  cause  a  copy  of  Its 
report  in  respect  thereto  to  be  delivered  to  such  common 
carrier,  together  with  a  notice  to  said  common  carrier  to  cease 
and  desist  from  such  violation,  or  to  make  reparation  for  the 
injury  so  found  to  have  been  done,  or  both,  within  a  reasonable 
time,  to  be  specified  by  the  Commission ;  and  if,  within  the 
time  specified,  it  shall  be  made  to  appear  to  the  Commission 
that  such  common  carrier  has  ceased  from  such  violation  of 
law,  and  has  made  reparation  for  the  injury  found  to  have 
been  done,  in  compliance  with  the  report  and  notice  of  the 
Commission,  or  to  the  satisfaction  of  the  party  complaining, 
a  statement  to  that  effect  shall  be  entered  of  record  by  the 
Commission,  and  the  said  common  carrier  shall  thereupon  be 
relieved  from  further  liability  or  penalty  for  such  particular 
violation  of  law. 

SEC.  1 6.  (As  amended  March  2,  1889.)  That  whenever 
any  common  carrier,  as  defined  in  and  subject  to  the  provi- 
sions of  this  act,  shall  violate,  or  refuse  or  neglect  to  obey 
301 


RAILWAY  LEGISLATION 

or  perform  any  lawful  order  or  requirement  of  the  Commis- 
sion created  by  this  act,  not  founded  upon  a  controversy 
requiring  a  trial  by  jury,  as  provided  by  the  seventh  amend- 
ment to  the  Constitution  of  the  United  States,  it  shall  be 
lawful  for  the  Commission  or  for  any  company  or  person 
interested  in  such  order  or  requirement,  to  apply  in  a  sum- 
mary way,  by  petition,  to  the  circuit  court  of  the  United 
States  sitting  in  equity  in  the  judicial  district  in  which  the 
common  carrier  complained  of  has  its  principal  office,  or  in 
which  the  violation  or  disobedience  of  such  order  or  require- 
ment shall  happen,  alleging  such  violation  or  disobedience, 
as  the  case  may  be ;  and  the  said  court  shall  have  power  to 
hear  and  determine  the  matter,  on  such  short  notice  to  the 
common  carrier  complained  of  as  the  court  shall  deem  reason- 
able ;  and  such  notice  may  be  served  on  such  common  carrier, 
his  or  its  officers,  agents,  or  servants  in  such  manner  as  the 
court  shall  direct ;  and  said  court  shall  proceed  to  hear  and 
determine  the  matter  speedily  as  a  court  of  equity,  and  with- 
out the  formal  pleadings  and  proceedings  applicable  to  ordi- 
nary suits  in  equity,  but  in  such  manner  as  to  do  justice  in  the 
premises ;  and  to  this  end  such  court  shall  have  power,  if  it 
think  fit,  to  direct  and  prosecute  in  such  mode  and  by  such 
persons  as  it  may  appoint,  all  such  inquiries  as  the  court  may 
think  needful  to  enable  it  to  form  a  just  judgment  in  the 
matter  of  such  petition ;  and  on  such  hearing  the  findings 
of  fact  in  the  report  of  said  Commission  shall  be  prima  facie 
evidence  of  the  matters  therein  stated ;  and  if  it  be  made  to 
appear  to  such  court,  on  such  hearing  or  on  report  of  any  such 
person  or  persons,  that  the  lawful  order  or  requirement  of 
said  Commission  drawn  in  question  has  been  violated  or  dis- 
obeyed, it  shall  be  lawful  for  such  court  to  issue  a  writ  of  in- 
junction or  other  proper  process,  mandatory  or  otherwise,  to 
restrain  such  common  carrier  from  further  continuing  such 
violation  or  disobedience  of  such  order  or  requirement  of  said 
Commission,  and  enjoining  obedience  to  the  same ;  and  in 
case  of  any  disobedience  of  any  such  writ  of  injunction  or  other 
proper  process,  mandatory  or  otherwise,  it  shall  be  lawful  for 
302 


APPENDIX 

such  court  to  issue  writs  of  attachment,  or  any  other  process 
of  said  court  incident  or  applicable  to  writs  of  injunction  or 
other  proper  process,  mandatory  or  otherwise,  against  such 
common  carrier,  and  if  a  corporation,  against  one  or  more  of 
the  directors,  officers,  or  agents  of  the  same,  or  against  any 
owner,  lessee,  trustee,  receiver,  or  other  person  failing  to  obey 
such  writ  of  injunction,  or  other  proper  process,  mandatory  or 
otherwise ;  and  said  court  may,  if  it  shall  think  fit,  make  an 
order  directing  such  common  carrier  or  other  person  so  dis- 
obeying such  writ  of  injunction  or  other  proper  process, 
mandatory  or  otherwise,  to  pay  such  sum  of  money,  not 
exceeding  for  each  carrier  or  person  in  default  the  sum  of 
five  hundred  dollars  for  every  day,  after  a  day  to  be  named 
in  the  order,  that  such  carrier  or  other  person  shall  fail  to 
obey  such  injunction  or  other  proper  process,  mandatory  or 
otherwise;  and  such  moneys  shall  be  payable  as  the  court 
shall  direct,  either  to  the  party  complaining  or  into  court,  to 
abide  the  ultimate  decision  of  the  court,  or  into  the  Treasury ; 
and  payment  thereof  may,  without  prejudice  to  any  other  mode 
of  recovering  the  same,  be  enforced  by  attachment  or  order  in 
the  nature  of  a  writ  of  execution,  in  like  manner  as  if  the  same 
had  been  recovered  by  a  final  decree  in  personam  in  such 
court.  When  the  subject  in  dispute  shall  be  of  the  value  of 
two  thousand  dollars  or  more,  either  party  to  such  proceeding 
before  said  court  may  appeal  to  the  Supreme  Court  of  the 
United  States,  under  the  same  regulations  now  provided  by 
law  in  respect  of  security  for  such  appeal;  but  such  appeal 
shall  not  operate  to  stay  or  supersede  the  order  of  the  court 
or  the  execution  of  any  writ  or  process  thereon ;  and  such 
court  may,  in  every  such  matter,  order  the  payment  of  such 
costs  and  counsel  fees  as  shall  be  deemed  reasonable.  When- 
ever any  such  petition  shall  be  filed  or  presented  by  the  Com- 
mission it  shall  be  the  duty  of  the  district  attorney,  under  the 
direction  of  the  Attorney-General  of  the  United  States,  to 
prosecute  the  same;  and  the  costs  and  expenses  of  such 
prosecution  shall  be  paid  out  of  the  appropriation  for  the 
expenses  of  the  courts  of  the  United  States. 

303 


RAILWAY   LEGISLATION 

If  the  matters  involved  in  any  such  order  or  requirement 
of  said  Commission  are  founded  upon  a  controversy  requir- 
ing a  trial  by  jury,  as  provided  by  the  seventh  amendment  to 
the  Constitution  of  the  United  States,  and  any  such  common 
carrier  shall  violate  or  refuse  or  neglect  to  obey  or  perform  the 
same,  after  notice  given  by  said  Commission  as  provided  in 
the  fifteenth  section  of  this  act,  it  shall  be  lawful  for  any  com- 
pany or  person  interested  in  such  order  or  requirement  to 
apply  in  a  summary  way  by  petition  to  the  circuit  court  of 
the  United  States  sitting  as  a  court  of  law  in  the  judicial  dis- 
trict in  which  the  carrier  complained  of  has  its  principal  office, 
or  in  which  the  violation  or  disobedience  of  such  order  or 
requirement  shall  happen,  alleging  such  violation  or  disobedi- 
ence as  the  case  may  be;  and  said  court  shall  by  its  order 
then  fix  a  time  and  place  for  the  trial  of  said  cause,  which 
shall  not  be  less  than  twenty  nor  more  than  forty  days  from 
the  time  said  order  is  made,  and  it  shall  be  the  duty  of  the 
marshal  of  the  district  in  which  said  proceeding  is  pending 
to  forthwith  serve  a  copy  of  said  petition,  and  of  said  order, 
upon  each  of  the  defendants,  and  it  shall  be  the  duty  of  the 
defendants  to  file  their  answers  to  said  petition  within  ten 
days  after  the  service  of  the  same  upon  them  as  aforesaid. 
At  the  trial  the  findings  of  fact  of  said  Commission  as  set 
forth  in  its  report  shall  be  prima  facie  evidence  of  the  matters 
therein  stated,  and  if  either  party  shall  demand  a  jury  or  shall 
omit  to  waive  a  jury  the  court  shall,  by  its  order,  direct  the 
marshal  forthwith  to  summon  a  jury  to  try  the  cause ;  but  if 
all  the  parties  shall  waive  a  jury  in  writing  then  the  court  shall 
try  the  issues  in  said  cause  and  render  its  judgment  thereon. 
If  the  subject  in  dispute  shall  be  of  the  value  of  two  thousand 
dollars  or  more  either  party  may  appeal  to  the  Supreme  Court 
of  the  United  States  under  the  same  regulations  now  provided 
by  law  in  respect  to  security  for  such  appeal ;  but  such  appeal 
must  be  taken  within  twenty  days  from  the  day  of  the  rendi- 
tion of  the  judgment  of  said  circuit  court.  If  the  judgment 
of  the  circuit  court  shall  be  in  favor  of  the  party  complaining 
he  or  they  shall  be  entitled  to  recover  a  reasonable  counsel  or 

304 


APPENDIX 

attorney's  fee,  to  be  fixed  by  the  court,  which  shall  be  col- 
lected as  part  of  the  costs  in  the  case.  For  the  purposes  of 
this  act,  excepting  its  penal  provisions,  the  circuit  courts  of  the 
United  States  shall  be  deemed  to  be  always  in  session. 

SEC.  17.  (As  amended  March  2,  1889.)  That  the  Commis- 
sion may  conduct  its  proceedings  in  such  manner  as  will  best 
conduce  to  the  proper  dispatch  of  business  and  to  the  ends 
of  justice.  A  majority  of  the  Commission  shall  constitute  a 
quorum  for  the  transaction  of  business,  but  no  Commissioner 
shall  participate  in  any  hearing  or  proceeding  in  which  he 
has  any  pecuniary  interest.  Said  Commission  may,  from  time 
to  time,  make  or  amend  such  general  rules  or  orders  as  may 
be  requisite  for  the  order  and  regulation  of  proceedings  before 
it,  including  forms  of  notices  and  the  service  thereof,  which 
shall  conform,  as  nearly  as  may  be,  to  those  in  use  in  the 
courts  of  the  United  States.  Any  party  may  appear  before 
said  Commission  and  be  heard,  in  person  or  by  attorney. 
Every  vote  and  official  act  of  the  Commission  shall  be 
entered  of  record,  and  its  proceedings  shall  be  public  upon 
the  request  of  either  party  interested.  Said  Commission 
shall  have  an  official  seal,  which  shall  be  judicially  noticed. 
Either  of  the  members  of  the  Commission  may  administer 
'oaths  and  affirmations  and  sign  subpoenas. 

SEC.  1 8.  (As  amended.)  That  each  Commissioner  shall 
receive  an  annual  salary  of  seven  thousand  five  hundred 
dollars,  payable  in  the  same  manner  as  the  judges  of  the 
courts  of  the  United  States.  The  Commission  shall  appoint 
a  secretary,  who  shall  receive  an  annual  salary  of  three 
thousand  five  hundred  dollars,  payable  in  like  manner.  The 
Commission  shall  have  authority  to  employ  and  fix  the  com- 
pensation of  such  other  employees  as  it  may  find  necessary  to 
the  proper  performance  of  its  duties.  Until  otherwise  pro- 
vided by  law,  the  Commission  may  hire  suitable  offices  for 
its  use,  and  shall  have  authority  to  procure  all  necessary 
office  supplies.  Witnesses  summoned  before  the  Commission 
shall  be  paid  the  same  fees  and  mileage  that  are  paid  wit- 
nesses in  the  courts  of  the  United  States. 

x  305 


RAILWAY  LEGISLATION 

All  of  the  expenses  of  the  Commission,  including  all  nec- 
essary expenses  for  transportation  incurred  by  the  Commis- 
sioners, or  by  their  employees  under  their  orders,  in  making 
any  investigation,  or  upon  official  business  in  any  other  places 
than  in  the  city  of  Washington,  shall  be  allowed  and  paid  on 
the  presentation  of  itemized  vouchers  therefor  approved  by 
the  chairman  of  the  Commission. 

SEC.  19.  That  the  principal  office  of  the  Commission  shall 
be  in  the  city  of  Washington,  where  its  general  sessions  shall 
be  held ;  but  whenever  the  convenience  of  the  public  or  the 
parties  may  be  promoted  or  delay  or  expense  prevented  there- 
by, the  Commission  may  hold  special  sessions  in  any  part  of 
the  United  States.  It  may,  by  one  or  more  of  the  Commis- 
sioners, prosecute  any  inquiry  necessary  to  its  duties,  in  any 
part  of  the  United  States,  into  any  matter  or  question  of  fact 
pertaining  to  the  business  of  any  common  carrier  subject  to 
the  provisions  of  this  act. 

SEC.  20.  That  the  Commission  is  hereby  authorized  to 
require  annual  reports  from  all  common  carriers  subject  to 
the  provisions  of  this  act,  to  fix  the  time  and  prescribe  the 
manner  in  which  such  reports  shall  be  made,  and  to  require 
from  such  carriers  specific  answers  to  all  questions  upon 
which  the  Commission  may  need  information.  Such  annual 
reports  shall  show  in  detail  the  amount  of  capital  stock  issued, 
the  amounts  paid  therefor,  and  the  manner  of  payment  for 
the  same;  the  dividends  paid,  the  surplus  fund,  if  any, 
and  the  number  of  stockholders ;  the  funded  and  floating 
debts  and  the  interest  paid  thereon ;  the  cost  and  value  of  the 
carrier's  property,  franchises,  and  equipments ;  the  number  of 
employees  and  the  salaries  paid  each  class ;  the  amounts 
expended  for  improvements  each  year,  how  expended,  and 
the  character  of  such  improvements;  the  earnings  and  re- 
ceipts from  each  branch  of  business  and  from  all  sources ;  the 
operating  and  other  expenses ;  the  balances  of  profit  and 
loss ;  and  a  complete  exhibit  of  the  financial  operations  of 
the  carrier  each  year,  including  an  annual  balance-sheet. 
Such  reports  shall  also  contain  such  information  in  relation  to 
306 


APPENDIX 

rates  or  regulations  concerning  fares  or  freights,  or  agree- 
ments, arrangements,  or  contracts  with  other  common  carriers, 
as  the  Commission  may  require ;  and  the  said  Commission 
may,  within  its  discretion,  for  the  purposes  of  enabling  it  the 
better  to  carry  out  the  purposes  of  this  act,  prescribe  (if  in  the 
opinion  of  the  Commission  it  is  practicable  to  prescribe  such 
uniformity  and  methods  of  keeping  accounts)  a  period  of 
time  within  which  all  common  carriers  subject  to  the  provi- 
sions of  this  act  shall  have,  as  near  as  may  be,  a  uniform 
system  of  accounts,  and  the  manner  in  which  such  accounts 
shall  be  kept. 

SEC.  21.  (As  amended  March  2,  1889.)  That  the  Commis- 
sion shall,  on  or  before  the  first  day  of  December  in  each 
year,  make  a  report,  which  shall  be  transmitted  to  Congress, 
and  copies  of  which  shall  be  distributed  as  are  the  other 
reports  transmitted  to  Congress.  This  report  shall  contain 
such  information  and  data  collected  by  the  Commission  as 
may  be  considered  of  value  in  the  determination  of  questions 
connected  with  the  regulation  of  commerce,  together  with 
such  recommendations  as  to  additional  legislation  relating 
thereto  as  the  Commission  may  deem  necessary;  and  the 
names  and  compensation  of  the  persons  employed  by  said 
Commission. 

SEC.  22.  {As  amended  March  2, 1889,  and  February  8,1893.) 
That  nothing  in  this  act  shall  prevent  the  carriage,  storage, 
or  handling  of  property  free  or  at  reduced  rates  for  the 
United  States,  State,  or  municipal  governments,  or  for 
charitable  purposes,  or  to  or  from  fairs  and  expositions  for 
exhibition  thereat,  or  the  free  carriage  of  destitute  and  home- 
less persons  transported  by  charitable  societies,  and  the 
necessary  agents  employed  in  such  transportation  or  the 
issuance  of  mileage,  excursion,  or  commutation  passenger 
tickets ;  nothing  in  this  act  shall  be  construed  to  prohibit 
any  common  carrier  from  giving  reduced  rates  to  ministers  of 
religion,  or  to  municipal  governments  for  the  transportation 
of  indigent  persons,  or  to  inmates  of  the  National  Homes  or 
State  Homes  for  Disabled  Volunteer  Soldiers,  and  of  Soldiers' 

307 


RAILWAY   LEGISLATION 

and  Sailors'  Orphan  Homes,  including  those  about  to  enter 
and  those  returning  home  after  discharge,  under  arrangements 
with  the  boards  of  managers  of  said  homes ;  nothing  in  this 
act  shall  be  construed  to  prevent  railroads  from  giving  free 
carriage  to  their  own  officers  and  employees,  or  to  prevent  the 
principal  officers  of  any  railroad  company  or  companies  from 
exchanging  passes  or  tickets  with  other  railroad  companies 
for  their  officers  and  employees ;  and  nothing  in  this  act  con- 
tained shall  in  any  way  abridge  or  alter  the  remedies  now 
existing  at  common  law  or  by  statute,  but  the  provisions  of 
this  act  are  in  addition  to  such  remedies  :  Provided,  That  no 
pending  litigation  shall  in  any  way  be  affected  by  this  act : 
Provided  further,  That  nothing  in  this  act  shall  prevent  the 
issuance  of  joint  interchangeable  five-thousand  mile  tickets, 
with  special  privileges  as  to  the  amount  of  free  baggage  that 
may  be  carried  under  mileage  tickets  of  one  thousand  or  more 
miles.  But  before  any  common  carrier,  subject  to  the  provi- 
sions of  this  act,  shall  issue  any  such  joint  interchangeable 
mileage  tickets  with  special  privileges,  as  aforesaid,  it  shall 
file  with  the  Interstate  Commerce  Commission  copies  of  the 
joint  tariffs  of  rates,  feres,  or  charges  on  which  such  joint 
interchangeable  mileage  tickets  are  to  be  based,  together  with 
specifications  of  the  amount  of  free  baggage  permitted  to  be 
carried  under  such  tickets,  in  the  same  manner  as  common 
carriers  are  required  to  do  with  regard  to  other  joint  rates  by 
section  six  of  this  act ;  and  all  the  provisions  of  said  section 
six  relating  to  joint  rates,  fares,  and  charges  shall  be  observed 
by  said  common  carriers  and  enforced  by  the  Interstate  Com- 
merce Commission  as  fully  with  regard  to  such  joint  inter- 
changeable mileage  tickets  as  with  regard  to  other  joint  rates, 
fares,  and  charges  referred  to  in  said  section  six.  It  shall  be 
unlawful  for  any  common  carrier  that  has  issued  or  authorized 
to  be  issued  any  such  joint  interchangeable  mileage  tickets 
to  demand,  collect,  or  receive  from  any  person  or  persons  a 
greater  or  less  compensation  for  transportation  of  persons  or 
baggage  under  such  joint  interchangeable  mileage  tickets 
than  that  required  by  the  rate,  fare,  or  charge  specified  in  the 
308 


APPENDIX 

copies  of  the  joint  tariff  of  rates,  fares,  or  charges  filed  with 
the  Commission  in  force  at  the  time.  The  provisions  of  sec- 
tion ten  of  this  act  shall  apply  to  any  violation  of  the  require- 
ments of  this  proviso. 

NEW  SECTION.  (Added  March  2,  1889.*)  That  the  circuit 
and  district  courts  of  the  United  States  shall  have  jurisdic- 
tion upon  the  relation  of  any  person  or  persons,  firm,  or  cor- 
poration, alleging  such  violation  by  a  common  carrier,  of  any 
of  the  provisions  of  the  act  to  which  this  is  a  supplement 
and  all  acts  amendatory  thereof,  as  prevents  the  relator  from 
having  interstate  traffic  moved  by  said  common  carrier  at  the 
same  rates  as  are  charged,  or  upon  terms  or  conditions  as 
favorable  as  those  given  by  said  common  carrier  for  like 
traffic  under  similar  conditions  to  any  other  shipper,  to  issue  a 
writ  or  writs  of  mandamus  against  said  common  carrier,  com- 
manding such  common  carrier  to  move  and  transport  the  traffic, 
or  to  furnish  cars  or  other  facilities  for  transportation  for  the 
party  applying  for  the  writ:  Provided,  That  if  any  question 
of  fact  as  to  the  proper  compensation  to  the  common  carrier 
for  the  service  to  be  enforced  by  the  writ  is  raised  by  the 
pleadings,  the  writ  of  peremptory  mandamus  may  issue,  not- 
withstanding such  question  of  fact  is  undetermined,  upon 
such  terms  as  to  security,  payment  of  money  into  the  court, 
or  otherwise,  as  the  court  may  think  proper,  pending  the 
determination  of  the  question  of  fact :  Provided,  That  the 
remedy  hereby  given  by  writ  of  mandamus  shall  be  cumula- 
tive, and  shall  not  be  held  to  exclude  or  interfere  with  other 
remedies  provided  by  this  act  or  the  act  to  which  it  is  a  sup- 
plement. 

Public  No.  41,  approved  February  4,  1887,  as  amended  by 
Public  No.  125,  approved  March  2,  1889,  and  Public  No.  72, 
approved  February  10,  1891.  Public  No.  38,  approved  Feb- 
ruary 8,  1895. 

An  act  in  relation  to  testimony  before  the  Interstate  Commerce  Com- 
mission, and  in  cases  or  proceedings  under  or  connected  with  an  act 
entitled  "  An  act  to  regulate  commerce,"  approved  February  fourth, 
eighteen  hundred  and  eighty-seven,  and  amendments  thereto. 

3°9 


RAILWAY  LEGISLATION 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
no  person  shall  be  excused  from  attending  and  testifying  or 
from  producing  books,  papers,  tariffs,  contracts,  agreements 
and  documents  before  the  Interstate  Commerce  Commission, 
or  in  obedience  to  the  subpoena  of  the  Commission,  whether 
such  subpoena  be  signed  or  issued  by  one  or  more  Commis- 
sioners, or  in  any  cause  or  proceeding,  criminal  or  otherwise, 
based  upon  or  growing  out  of  any  alleged  violation  of  the  act 
of  Congress,  entitled  "  An  act  to  regulate  commerce,"  approved 
February  fourth,  eighteen  hundred  and  eighty-seven,  or  of 
any  amendment  thereof  on  the  ground  or  for  the  reason  that 
the  testimony  or  evidence,  documentary  or  otherwise,  required 
of  him,  may  tend  to  criminate  him  or  subject  him  to  a  penalty 
or  forfeiture.  But  no  person  shall  be  prosecuted  or  subjected 
to  any  penalty  or  forfeiture  for  or  on  account  of  any  trans- 
action, matter  or  thing,  concerning  which  he  may  testify,  or 
produce  evidence,  documentary  or  otherwise,  before  said 
Commission,  or  in  obedience  to  its  subpoena,  or  the  subpoena 
of  either  of  them,  or  in  any  such  case  or  proceeding :  Pro- 
vided, That  no  person  so  testifying  shall  be  exempt  from 
prosecution  and  punishment  for  perjury  committed  in  so 
testifying. 

Any  person  who  shall  neglect  or  refuse  to  attend  and  testify, 
or  to  answer  any  lawful  inquiry,  or  to  produce  books,  papers, 
tariffs,  contracts,  agreements  and  documents,  if  in  his  power 
to  do  so,  in  obedience  to  the  subpoena  or  lawful  requirement 
of  the  Commission  shall  be  guilty  of  an  offense  and  upon 
conviction  thereof  by  a  court  of  competent  jurisdiction  shall 
be  punished  by  fine  not  less  than  one  hundred  dollars  nor 
more  than  five  thousand  dollars,  or  by  imprisonment  for  not 
more  than  one  year  or  by  both  such  fine  and  imprisonment. 

Public  No.  54,  approved,  February  11,  1893. 

An  act  to  promote  the  safety  of  employees  and  travelers  upon  railroads 
by  compelling  common  carriers  engaged  in  interstate  commerce  to 
equip  their  cars  with  automatic  couplers  and  continuous  brakes  and 
their  locomotives  with  driving-wheel  brakes,  and  for  other  purposes. 

310 


APPENDIX 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
from  and  after  the  first  day  of  January,  eighteen  hundred  and 
ninety-eight,  it  shall  be  unlawful  for  any  common  carrier  en- 
gaged in  interstate  commerce  by  railroad  to  use  on  its  line 
any  locomotive  engine  in  moving  interstate  traffic  not  equipped 
with  a  power  driving-wheel  brake  and  appliances  for  operating 
the  train-brake  system,  or  to  run  any  train  in  such  traffic  after 
said  date  that  has  not  a  sufficient  number  of  cars  in  it  so 
equipped  with  power  or  train  brakes  that  the  engineer  on  the 
locomotive  drawing  such  train  can  control  its  speed  without 
requiring  brakemen  to  use  the  common  hand  brake  for  that 
purpose. 

SEC.  2.  That  on  and  after  the  first  day  of  January,  eighteen 
hundred  and  ninety-eight,  it  shall  be  unlawful  for  any  such 
common  carrier  to  haul  or  permit  to  be  hauled  or  used  on 
its  line  any  car  used  in  moving  interstate  traffic  not  equipped 
with  couplers  coupling  automatically  by  impact,  and  which 
can  be  uncoupled  without  the  necessity  of  men  going  between 
the  ends  of  the  cars. 

SEC.  3.  That  when  any  person,  firm,  company,  or  corpora- 
tion engaged  in  interstate  commerce  by  railroad  shall  have 
equipped  a  sufficient  number  of  its  cars  so  as  to  comply  with 
the  provisions  of  section  one  of  this  act,  it  may  lawfully  refuse 
to  receive  from  connecting  lines  of  road  or  shippers  any  cars 
not  equipped  sufficiently,  in  accordance  with  the  first  section 
of  this  act,  with  such  power  or  train  brakes  as  will  work  and 
readily  interchange  with  the  brakes  in  use  on  its  own  cars,  as 
required  by  this  act. 

SEC.  4.  That  from  and  after  the  first  day  of  July,  eighteen 
hundred  and  ninety-five,  until  otherwise  ordered  by  the  Inter- 
state Commerce  Commission,  it  shall  be  unlawful  for  any  rail- 
road company  to  use  any  car  in  interstate  commerce  that  is 
not  provided  with  secure  grab  irons  or  handholds  in  the 
ends  and  sides  of  each  car  for  greater  security  to  men  in 
coupling  and  uncoupling  cars. 

SEC.  5.   That  within  ninety  days  from  the  passage  of  this 


RAILWAY  LEGISLATION 

act  the  American  Railway  Association  is  authorized  hereby 
to  designate  to  the  Interstate  Commerce  Commission  the 
standard  height  of  drawbars  for  freight  cars,  measured  per- 
pendicular from  the  level  of  the  tops  of  the  rails  to  the  centers 
of  the  drawbars,  for  each  of  the  several  gauges  of  railroads  in 
use  in  the  United  States,  and  shall  fix  a  maximum  variation 
from  such  standard  height  to  be  allowed  between  the  draw- 
bars of  empty  and  loaded  cars.  Upon  their  determination 
being  certified  to  the  Interstate  Commerce  Commission,  said 
Commission  shall  at  once  give  notice  of  the  standard  fixed 
upon  to  all  common  carriers,  owners,  or  lessees  engaged  in 
interstate  commerce  in  the  United  States  by  such  means  as 
the  Commission  may  deem  proper.  But  should  said  associa- 
tion fail  to  determine  a  standard  as  above  provided,  it  shall 
be  the  duty  of  the  Interstate  Commerce  Commission  to  do  so, 
before  July  first,  eighteen  hundred  and  ninety-four,  and  im- 
mediately to  give  notice  thereof  as  aforesaid.  And  after  July 
first,  eighteen  hundred  and  ninety-five,  no  cars,  either  loaded 
or  unloaded,  shall  be  used  in  interstate  traffic  which  do  not 
comply  with  the  standard  above  provided  for. 

SEC.  6.  That  any  such  common  carrier  using  any  locomo- 
tive engine,  running  any  train,  or  hauling  or  permitting  to  be 
hauled  or  used  on  its  line  any  car  in  violation  of  any  of  the 
provisions  of  this  act,  shall  be  liable  to  a  penalty  of  one 
hundred  dollars  for  each  and  every  such  violation,  to  be 
recovered  in  a  suit  or  suits  to  be  brought  by  the  United 
States  district  attorney  in  the  district  court  of  the  United 
States  having  jurisdiction  in  the  locality  where  such  violation 
shall  have  been  committed,  and  it  shall  be  the  duty  of  such 
district  attorney  to  bring  such  suits  upon  duly  verified  infor- 
mation being  lodged  with  him  of  such  violation  having  oc- 
curred. And  it  shall  also  be  the  duty  of  the  Interstate 
Commerce  Commission  to  lodge  with  the  proper  district 
attorneys  information  of  any  such  violations  as  may  come 
to  its  knowledge :  Provided,-  That  nothing  in  this  act  con- 
tained shall  apply  to  trains  composed  of  four-wheel  cars  or 
to  locomotives  used  in  hauling  such  trains. 
312 


APPENDIX 

SEC.  7.  That  the  Interstate  Commerce  Commission  may 
from  time  to  time  upon  full  hearing  and  for  good  cause  ex- 
tend the  period  within  which  any  common  carrier  shall  com- 
ply with  the  provisions  of  this  act. 

SEC.  8.  That  any  employee  of  any  such  common  carrier 
who  may  be  injured  by  any  locomotive,  car,  or  train  in  use 
contrary  to  the  provisions  of  this  act  shall  not  be  deemed 
thereby  to  have  assumed  the  risk  thereby  occasioned,  although 
continuing  in  the  employment  of  such  carrier  after  the  unlaw- 
ful use  of  such  locomotive,  car,  or  train  had  been  brought  to 
his  knowledge. 

Public  No.  113,  approved,  March  2,  1893. 

An  act  supplementary  to  the  act  of  July  first,  eighteen  hundred  and 
sixty-two,  entitled  "  An  act  to  aid  in  the  construction  of  a  railroad 
and  telegraph  line  from  the  Missouri  River  to  the  Pacific  Ocean,  and 
to  secure  to  the  Government  the  use  of  the  same  for  postal,  military, 
and  other  purposes,"  and  also  of  the  act  of  July  second,  eighteen 
hundred  and  sixty-four,  and  other  acts  amendatory  of  said  first- 
named  act. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  all 
railroad  and  telegraph  companies  to  which  the  United  States 
has  granted  any  subsidy  in  lands  or  bonds  or  loan  of  credit 
for  the  construction  of  either  railroad  or  telegraph  lines,  which, 
by  the  acts  incorporating  them,  or  by  any  act  amendatory  or 
supplementary  thereto,  are  required  to  construct,  maintain,  or 
operate  telegraph  lines,  and  all  companies  engaged  in  operating 
said  railroad  or  telegraph  lines  shall  forthwith  and  hence- 
forward, by  and  through  their  own  respective  corporate  offi- 
cers and  employees,  maintain,  and  operate,  for  railroad, 
Governmental,  commercial,  and  all  other  purposes,  telegraph 
lines,  and  exercise  by  themselves  alone  all  the  telegraph 
franchises  conferred  upon  them  and  obligations  assumed  by 
them  under  the  acts  making  the  grants  as  aforesaid. 

SEC.  2.  That  whenever  any  telegraph  company  which  shall 
have  accepted  the  provisions  of  title  sixty-five  of  the  Revised 
Statutes  shall  extend  its  line  to  any  station  or  office  of  a 

313 


RAILWAY   LEGISLATION 

telegraph  line  belonging  to  any  one  of  said  railroad  or  tele- 
graph companies,  referred  to  in  the  first  section  of  this  act, 
said  telegraph  company  so  extending  its  line  shall  have  the 
right  and  said  railroad  or  telegraph  company  shall  allow  the 
line  of  said  telegraph  company  so  extending  its  line  to 
connect  with  the  telegraph  line  of  said  railroad  or  telegraph 
company  to  which  it  is  extended  at  the  place  where  their 
lines  may  meet,  for  the  prompt  and  convenient  interchange 
of  telegraph  business  between  said  companies;  and  such 
railroad  and  telegraph  companies,  referred  to  in  the  first  sec- 
tion of  this  act,  shall  so  operate  their  respective  telegraph 
lines  as  to  afford  equal  facilities  to  all,  without  discrimina- 
tion in  favor  of  or  against  any  person,  company,  or  corpora- 
tion whatever,  and  shall  receive,  deliver,  and  exchange 
business  with  connecting  telegraph  lines  on  equal  terms,  and 
affording  equal  facilities,  and  without  discrimination  for  or 
against  any  one  of  such  connecting  lines  ;  and  such  exchange 
of  business  shall  be  on  terms  just  and  equitable. 

SEC.  3.  That  if  any  such  railroad  or  telegraph  company 
referred  to  in  the  first  section  of  this  act,  or  company  oper- 
ating such  railroad  or  telegraph  line  shall  refuse  or  fail,  in 
whole  or  in  part,  to  maintain,  and  operate  a  telegraph  line  as 
provided  in  this  act  and  acts  to  which  this  is  supplementary, 
for  the  use  of  the  Government  or  the  public,  for  commercial 
and  other  purposes,  without  discrimination,  or  shall  refuse  or 
fail  to  make  or  continue  such  arrangements  for  the  inter- 
change of  business  with  any  connecting  telegraph  company, 
then  any  person,  company,  corporation,  or  connecting  tele- 
graph company  may  apply  for  relief  to  the  Interstate  Com- 
merce Commission,  whose  duty  it  shall  thereupon  be,  under 
such  rules  and  regulations  as  said  Commission  may  prescribe, 
to  ascertain  the  facts,  and  determine  and  order  what  arrange- 
ment is  proper  to  be  made  in  the  particular  case,  and  the 
railroad  or  telegraph  company  concerned  shall  abide  by  and 
perform  such  order ;  and  it  shall  be  the  duty  of  the  Interstate 
Commerce  Commission,  when  such  determination  and  order 
are  made,  to  notify  the  parties  concerned,  and,  if  necessary, 


APPENDIX 

enforce  the  same  by  writ  of  mandamus  in  the  courts  of  the 
United  States,  in  the  name  of  the  United  States,  at  the  rela- 
tion of  either  of  said  Interstate  Commerce  Commissioners : 
Provided,  That  the  said  Commissioners  may  institute  any 
inquiry,  upon  their  own  motion,  in  the  same  manner  and 
to  the  same  effect  as  though  complaint  had  been  made. 

SEC.  4.  That  in  order  to  secure  and  preserve  to  the  United 
States  the  full  value  and  benefit  of  its  liens  upon  all  the 
telegraph  lines  required  to  be  constructed  by  and  lawfully 
belonging  to  said  railroad  and  telegraph  companies  referred 
to  in  the  first  section  of  this  act,  and  to  have  the  same 
possessed,  used,  and  operated  in  conformity  with  the  pro- 
visions of  this  act  and  of  the  several  acts  to  which  this  act 
is  supplementary,  it  is  hereby  made  the  duty  of  the  Attorney- 
General  of  the  United  States,  by  proper  proceedings,  to 
prevent  any  unlawful  interference  with  the  rights  and  equities 
of  the  United  States  under  this  act,  and  under  the  acts  here- 
inbefore mentioned,  and  under  all  acts  of  Congress  relating  to 
such  railroads  and  telegraph  lines,  and  to  have  legally  ascer- 
tained and  finally  adjudicated  all  alleged  rights  of  all  persons 
and  corporations  whatever  claiming  in  any  manner  any  con- 
trol or  interest  of  any  kind  in  any  telegraph  lines  or  property, 
or  exclusive  rights  of  way  upon  the  lands  of  said  railroad 
companies,  or  any  of  them,  and  to  have  all  contracts  and 
provisions  of  contracts  set  aside  and  annulled  which  have 
been  unlawfully  and  beyond  their  powers  entered  into  by  said 
railroad  or  telegraph  companies,  or  any  of  them,  with  any 
other  person,  company,  or  corporation. 

SEC.  5.  That  any  officer  or  agent  of  said  railroad  or  tele- 
graph companies,  or  of  any  company  operating  the  railroads 
and  telegraph  lines  of  said  companies,  who  shall  refuse  or 
fail  to  operate  the  telegraph  lines  of  said  railroad  or  telegraph 
companies  under  his  control,  or  which  he  is  engaged  in  operat- 
ing, in  the  manner  directed  in  this  act  and  by  the  acts  to 
which  it  is  supplementary,  or  who  shall  refuse  or  fail,  in  such 
operation  and  use,  to  afford  and  secure  to  the  Government 
and  the  public  equal  facilities,  or  to  secure  to  each  of  said 


RAILWAY   LEGISLATION 

connecting  telegraph  lines  equal  advantages  and  facilities 
in  the  interchange  of  business,  as  herein  provided  for,  with- 
out any  discrimination  whatever  for  or  adverse  to  the  tele- 
graph line  of  any  or  either  of  said  connecting  companies,  or 
shall  refuse  to  abide  by,  or  perform  and  carry  out  within  a 
reasonable  time  the  order  or  orders  of  the  Interstate  Com- 
merce Commission,  shall  in  every  such  case  of  refusal  or  fail- 
ure be  guilty  of  a  misdemeanor,  and,  on  conviction  thereof, 
shall  in  every  such  case  be  fined  in  a  sum  not  exceeding  one 
thousand  dollars,  and  may  be  imprisoned  not  less  than  six 
months ;  and  in  every  such  case  of  refusal  or  failure  the  party 
aggrieved  may  not  only  cause  the  officer  or  agent  guilty 
thereof  to  be  prosecuted  under  the  provisions  of  this  section, 
but  may  also  bring  an  action  for  the  damages  sustained 
thereby  against  the  company  whose  officer  or  agent  may  be 
guilty  thereof,  in  the  circuit  or  district  court  of  the  United 
States  in  any  State  or  Territory  in  which  any  portion  of  the 
road  or  telegraph  line  of  said  company  may  be  situated ;  and 
in  case  of  suit  process  may  be  served  upon  any  agent  of  the 
company  found  in  such  State  or  Territory,  and  such  service 
shall  be  held  by  the  court  good  and  sufficient. 

SEC.  6.  That  it  shall  be  the  duty  of  each  and  every  one 
of  the  aforesaid  railroad  and  telegraph  companies,  within  sixty 
days  from  and  after  the  passage  of  this  act,  to  file  with  the 
Interstate  Commerce  Commission  copies  of  all  contracts  and 
agreements  of  every  description  existing  between  it  and  every 
other  person  or  corporation  whatsoever  in  reference  to  the 
ownership,  possession,  maintenance,  control,  use,  or  operation 
of  any  telegraph  lines,  or  property  over  or  upon  its  rights  of 
way,  and  also  a  report  describing  with  sufficient  certainty  the 
telegraph  lines  and  property  belonging  to  it,  and  the  manner 
in  which  the  same  are  being  then  used  and  operated  by  it,  and 
the  telegraph  lines  and  property  upon  its  right  of  way  in  which 
any  other  person  or  corporation  claims  to  have  a  title  or  inter- 
est, and  setting  forth  the  grounds  of  such  claim,  and  the  manner 
in  which  the  same  are  being  then  used  and  operated ;  and  it 
shall  be  the  duty  of  each  and  every  one  of  said  railroad  and 

316 


APPENDIX 

telegraph  companies  annually  hereafter  to  report  to  the  Inter- 
state Commerce  Commission,  with  reasonable  fullness  and  cer- 
tainty, the  nature,  extent,  value,  and  condition  of  the  telegraph 
lines  and  property  then  belonging  to  it,  the  gross  earnings 
and  all  expenses  of  maintenance,  use,  and  operation  thereof 
and  its  relation  and  business  with  all  connecting  telegraph 
companies  during  the  preceding  year,  at  such  time  and  in  such 
manner  as  may  be  required  by  a  system  of  reports  which  said 
Commission  shall  prescribe ;  and  if  any  of  said  railroad  or 
telegraph  companies  shall  refuse  or  fail  to  make  such  reports 
or  any  report  as  may  be  called  for  by  said  Commission,  or 
refuse  to  submit  its  books  and  records  for  inspection,  such 
neglect  or  refusal  shall  operate  as  a  forfeiture,  in  each  case  of 
such  neglect  or  refusal,  of  a  sum  not  less  than  one  thousand 
dollars  nor  more  than  five  thousand  dollars,  to  be  recovered 
by  the  Attorney-General  of  the  United  States,  in  the  name 
and  for  the  use  and  benefit  of  the  United  States ;  and  it  shall 
be  the  duty  of  the  Interstate  Commerce  Commission  to  inform 
the  Attorney-General  of  all  such  cases  of  neglect  or  refusal, 
whose  duty  it  shall  be  to  proceed  at  once  to  judicially  enforce 
the  forfeitures  hereinbefore  provided. 

SEC.  7.  That  nothing  in  this  act  shall  be  construed  to 
affect  or  impair  the  right  of  Congress,  at  any  time  hereafter, 
to  alter,  amend,  or  repeal  the  said  acts  hereinbefore  men- 
tioned ;  and  this  act  shall  be  subject  to  alteration,  amend- 
ment, or  repeal  as,  in  the  opinion  of  Congress,  justice  or  the 
public  welfare  may  require ;  and  nothing  herein  contained 
shall  be  held  to  deny,  exclude,  or  impair  any  right  or  remedy 
in  the  premises  now  existing  in  the  United  States,  or  any 
authority  that  the  Postmaster-General  now  has  under  title 
sixty-five  of  the  Revised  Statutes  to  fix  rates,  or,  of  the 
Government,  to  purchase  lines  as  provided  under  said  title, 
or  to  have  its  messages  given  precedence  in  transmission. 

Public  No.  237,  approved,  August  7,  1888. 


31? 


RAILWAY   LEGISLATION 

SUPPLEMENT 

Since  this  book  was  completed  in  December,  1902,  the 
Elkins  Bill  has  become  a  law.  A  copy  of  the  law  is  given 
below  together  with  an  explanatory  statement  from  the  Inter- 
state Commerce  Commission.  This  statement  of  the  Commis- 
sion was  issued  at  the  request  of  a  leading  railway  official, 
and  must  be  regarded  as  a  private  letter  sent  in  response  to  a 
private  inquiry.  The  secretary  of  the  Commission  reminds 
the  author  that  this  "is  purely  an  ex  part  e  opinion  and  simply 
the  Commission's  i  present  impressions.'  I  know  of  no  other 
expression  in  regard  to  the  matter,  and  the  communication  to 
Mr.  Morton  carried  with  it  no  authoritative  declaration  of  the 
law." 

[PUBLIC  — No.  103.] 

An  Act  to  further  regulate  commerce  with  foreign  nations  and  among 
the  States. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled^  That 
anything  done  or  omitted  to  be  done  by  a  corporation  common 
carrier,  subject  to  the  Act  to  regulate  commerce  and  the  Acts 
amendatory  thereof  which,  if  done  or  omitted  to  be  done  by 
any  director  or  officer  thereof,  or  any  receiver,  trustee,  lessee, 
agent,  or  person  acting  for  or  employed  by  such  corporation, 
would  constitute  a  misdemeanor  under  said  Acts  or  under 
this  Act  shall  also  be  held  to  be  a  misdemeanor  committed 
by  such  corporation,  and  upon  conviction  thereof  it  shall  be 
subject  to  like  penalties  as  are  prescribed  in  said  Acts  or  by 
this  Act  with  reference  to  such  persons  except  as  such  penalties 
are  herein  changed.  The  willful  failure  upon  the  part  of  any 
carrier  subject  to  said  Acts  to  file  and  publish  the  tariffs  or 
rates  and  charges  as  required  by  said  Acts  or  strictly  to  observe 
such  tariffs  until  changed  according  to  law,  shall  be  a  mis- 
demeanor, and  upon  conviction  thereof  the  corporation  offend- 
ing shall  be  subject  to  a  fine  not  less  than  one  thousand 
dollars  nor  more  than  twenty  thousand  dollars  for  each  offense ; 
and  it  shall  be  unlawful  for  any  person,  persons,  or  corporation 

318 


APPENDIX 

to  offer,  grant,  or  give  or  to  solicit,  accept,  or  receive  any  rebate, 
concession,  or  discrimination  in  respect  of  the  transportation 
of  any  property  in  interstate  or  foreign  commerce  by  any 
common  carrier  subject  to  said  Act  to  regulate  commerce  and 
the  Acts  amendatory  thereto  whereby  any  such  property  shall 
by  any  device  whatever  be  transported  at  a  less  rate  than  that 
named  in  the  tariffs  published  and  filed  by  such  carrier,  as  is 
required  by  said  Act  to  regulate  commerce  and  the  Acts 
amendatory  thereto,  or  whereby  any  other  advantage  is  given 
or  discrimination  is  practiced.  Every  person  or  corporation 
who  shall  offer,  grant,  or  give  or  solicit,  accept  or  receive  any 
such  rebates,  concession,  or  discrimination  shall  be  deemed 
guilty  of  a  misdemeanor,  and  on  conviction  thereof  shall  be 
punished  by  a  fine  of  not  less  than  one  thousand  dollars  nor 
more  than  twenty  thousand  dollars.  In  all  convictions  occur- 
ring after  the  passage  of  this  Act  for  offenses  under  said  Acts 
to  regulate  commerce,  whether  committed  before  or  after  the 
passage  of  this  Act,  or  for  offenses  under  this  section,  no 
penalty  shall  be  imposed  on  the  convicted  party  other  than 
the  fine  prescribed  by  law,  imprisonment  wherever  now 
prescribed  as  part  of  the  penalty  being  hereby  abolished. 
Every  violation  of  this  section  shall  be  prosecuted  in  any 
court  of  the  United  States  having  jurisdiction  of  crimes  within 
the  district  in  which  such  violation  was  committed  or  through 
which  the  transportation  may  have  been  conducted  ;  and 
whenever  the  offense  is  begun  in  one  jurisdiction  and 
completed  in  another  it  may  be  dealt  with,  inquired  of,  tried, 
determined,  and  punished  in  either  jurisdiction  in  the  same 
manner  as  if  the  offense  had  been  actually  and  wholly  com- 
mitted therein. 

In  construing  and  enforcing  the  provisions  of  this  section 
the  act,  omission,  or  failure  of  any  officer,  agent,  or  other 
person  acting  for  or  employed  by  any  common  carrier  acting 
within  the  scope  of  his  employment  shall  in  every  case  be 
also  deemed  to  be  the  act,  omission,  or  failure  of  such  carrier 
as  well  as  that  of  the  person.  Whenever  any  carrier  files 
with  the  Interstate  Commerce  Commission  or  publishes  a 

319 


RAILWAY   LEGISLATION 

particular  rate  under  the  provisions  of  the  Act  to  regulate 
commerce  or  Acts  amendatory  thereto,  or  participates  in  any 
rates  so  filed  or  published,  that  rate  as  against  such  carrier, 
its  officers,  or  agents  in  any  prosecution  begun  under  this  Act 
shall  be  conclusively  deemed  to  be  the  legal  rate,  and  any  de- 
parture from  such  rate,  or  any  offer  to  depart  therefrom,  shall 
be  deemed  to  be  an  offense  under  this  section  of  this  Act. 

SEC.  2.  That  in  any  proceeding  for  the  enforcement  of  the 
provisions  of  the  statutes  relating  to  interstate  commerce, 
whether  such  proceedings  be  instituted  before  the  Interstate 
Commerce  Commission  or  be  begun  originally  in  any  circuit 
court  of  the  United  States,  it  shall  be  lawful  to  include  as 
parties,  in  addition  to  the  carrier,  all  persons  interested  in  or 
affected  by  the  rate,  regulation,  or  practice  under  consideration, 
and  inquiries,  investigations,  orders,  and  decrees  may  be  made 
with  reference  to  and  against  such  additional  parties  in  the  same 
manner,  to  the  same  extent,  and  subject  to  the  same  provisions 
as  are  or  shall  be  authorized  by  law  with  respect  to  carriers. 

SEC.  3.  That  whenever  the  Interstate  Commerce  Com- 
mission shall  have  reasonable  ground  for  belief  that  any 
common  carrier  is  engaged  in  the  carriage  of  passengers  or 
freight  traffic  between  given  points  at  less  than  the  published 
rates  on  file,  or  is  committing  any  discriminations  forbidden 
by  law,  a  petition  may  be  presented  alleging  such  facts  to  the 
circuit  court  of  the  United  States  sitting  in  equity  having 
jurisdiction  ;  and  when  the  act  complained  of  is  alleged  to 
have  been  committed  or  as  being  committed  in  part  in  more 
than  one  judicial  district  or  State,  it  may  be  dealt  with,  inquired 
of,  tried,  and  determined  in  either  such  judicial  district  or 
State,  whereupon  it  shall  be  the  duty  of  the  court  summarily 
to  inquire  into  the  circumstances,  upon  such  notice  and  in 
such  manner  as  the  court  shall  direct  and  without  the  formal 
pleadings  and  proceedings  applicable  to  ordinary  suits  in  equity, 
and  to  make  such  other  persons  or  corporations  parties  thereto 
as  the  court  may  deem  necessary,  and  upon  being  satisfied  of 
the  truth  of  the  allegations  of  said  petition  said  court  shall 
enforce  an  observance  of  the  published  tariffs  or  direct  and 
320 


APPENDIX 

require  a  discontinuance  of  such  discrimination  by  proper 
orders,  writs,  and  process,  which  said  orders,  writs,  and  process 
may  be  enforceable  as  well  against  the  parties  interested  in 
the  traffic  as  against  the  carrier,  subject  to  the  right  of  appeal 
as  now  provided  by  law.  It  shall  be  the  duty  of  the  several 
district  attorneys  of  the  United  States,  whenever  the  Attorney- 
General  shall  direct,  either  of  his  own  motion  or  upon  the 
request  of  the  Interstate  Commerce  Commission,  to  institute 
and  prosecute  such  proceedings,  and  the  proceedings  provided 
for  by  this  Act  shall  not  preclude  the  bringing  of  suit  for  the 
recovery  of  damages  by  any  party  injured,  or  any  other  action 
provided  by  said  Act  approved  February  fourth,  eighteen  hun- 
dred and  eighty-seven,  entitled  An  Act  to  regulate  commerce 
and  the  Acts  amendatory  thereof.  And  in  proceedings  under 
this  Act  and  the  Acts  to  regulate  commerce  the  said  courts 
shall  have  the  power  to  compel  the  attendance  of  witnesses, 
both  upon  the  part  of  the  carrier  and  ihe  shipper,  who  shall 
be  required  to  answer  on  all  subjects  relating  directly  or  indi- 
rectly to  the  matter  in  controversy,  and  to  compel  the  produc- 
tion of  all  books  and  papers,  both  of  the  carrier  and  the  shipper 
which  relate  directly  or  indirectly  to  such  transaction;  the 
claim  that  such  testimony  or  evidence  may  tend  to  criminate 
the  person  giving  such  evidence  shall  not  excuse  such  person 
from  testifying  or  such  corporation  producing  its  books  and 
papers,  but  no  person  shall  be  prosecuted  or  subjected  to  any 
penalty  or  forfeiture  for  or  on  account  of  any  transaction, 
matter,  or  thing  concerning  which  he  may  testify  or  produce 
evidence  documentary  or  otherwise  in  such  proceeding :  Pro- 
vided, That  the  provisions  of  an  Act  entitled  "  An  Act  to  expe- 
dite the  hearing  and  determination  of  suits  in  equity  pending 
or  hereafter  brought  under  the  Act  of  July  second,  eighteen 
hundred  and  ninety,  entitled  <An  Act  to  protect  trade  and 
commerce  against  unlawful  restraints  and  monopolies,'  'An 
Act  to  regulate  commerce,'  approved  February  fourth,  eighteen 
hundred  and  eighty-seven,  or  any  other  Acts  having  a  like 
purpose  that  may  be  hereafter  enacted,  approved  February 
eleventh,  nineteen  hundred  and  three,"  shall  apply  to  any  case 
Y  321 


RAILWAY  LEGISLATION 

prosecuted  under  the  direction  of  the  Attorney-General  in  the 
name  of  the  Interstate  Commerce  Commission. 

SEC.  4.  That  all  Acts  and  parts  of  Acts  in  conflict  with  the 
provisions  of  this  Act  are  hereby  repealed,  but  such  repeal 
shall  not  affect  causes  now  pending  nor  rights  which  have 
already  accrued,  but  such  causes  shall  be  prosecuted  to  a  con- 
clusion and  such  rights  enforced  in  a  manner  heretofore  pro- 
vided by  law  and  as  modified  by  the  provisions  of  this  Act. 

SEC.  5.  That  this  Act  shall  take  effect  from  its  passage. 

Approved,  February  19,  1903. 

[PUBLIC  — No.  82.] 

An  Act  To  expedite  the  hearing  and  determination  of  suits  in  equity 
pending  or  hereafter  brought  under  the  Act  of  July  second,  eighteen 
hundred  and  ninety,  entitled  "An  Act  to  protect  trade  and  com- 
merce against  unlawful  restraints  and  monopolies,"  "  An  Act  to  regu- 
late commerce,"  approved  February  fourth,  eighteen  hundred  and 
eighty-seven,  or  any  dther  Acts  having  a  like  purpose  that  may  be 
hereafter  enacted. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  in 
any  suit  in  equity  pending  or  hereafter  brought  in  any  circuit 
court  of  the  United  States  under  the  Act  entitled  "  An  Act  to 
protect  trade  and  commerce  against  unlawful  restraints  and 
monopolies,"  approved  July  second,  eighteen  hundred  and 
ninety,  "  An  Act  to  regulate  commerce,"  approved  February 
fourth,  eighteen  hundred  and  eighty-seven,  or  any  other  Acts 
having  a  like  purpose  that  hereafter  may  be  enacted,  wherein 
the  United  States  is  complainant,  the  Attorney-General  may 
file  with  the  clerk  of  such  court  a  certificate  that,  in  his  opinion, 
the  case  is  of  general  public  importance,  a  copy  of  which  shall 
be  immediately  furnished  by  such  clerk  to  each  of  the  circuit 
judges  of  the  circuit  in  which  the  case  is  pending.  There- 
upon such  case  shall  be  given  precedence  over  others  and  in 
every  way  expedited,  and  be  assigned  for  hearing  at  the  earli- 
est practicable  day,  before  not  less  than  three  of  the  circuit 
judges  of  said  circuit,  if  there  be  three  or  more  ;  and  if  there 
322 


APPENDIX 

be  not  more  than  two  circuit  judges,  then  before  them  and 
such  district  judge  as  they  may  select.  In  the  event  the 
judges  sitting  in  such  case  shall  be  divided  in  opinion,  the 
case  shall  be  certified  to  the  Supreme  Court  for  review  in  like 
manner  as  if  taken  there  by  appeal  as  hereinafter  provided. 

SEC.  2.  That  in  every  suit  in  equity  pending  or  hereafter 
brought  in  any  circuit  court  of  the  United  States  under  any  of 
said  Acts,  wherein  the  United  States  is  complainant,  including 
cases  submitted  but  not  yet  decided,  an  appeal  from  the  final 
decree  of  the  circuit  court  will  lie  only  to  the  Supreme  Court 
and  must  be  taken  within  sixty  days  from  the  entry  thereof : 
Provided,  That  in  any  case  where  an  appeal  may  have  been 
taken  from  the  final  decree  of  a  circuit  court  to  the  circuit 
court  of  appeals  before  this  Act  takes  effect,  the  case  shall 
proceed  to  a  final  decree  therein,  and  an  appeal  may  be  taken 
from  such  decree  to  the  Supreme  Court  in  the  manner  now 
provided  by  law. 

Approved,  February  u,  1903. 

VIEWS  OF  THE  COMMISSION  ON  THE   ELKINS 

LAW 

February  27,  1903. 

MR.  PAUL  MORTON,  Vice  President 

A.  T.  &  S.  F.  Ry.  Co.,  Chicago,  111. 
DEAR  SIR  : 

It  has  not  been  practicable  to  make  earlier  reply  to  your 
letters  of  i6th  and  i;th  instant. 

The  Commission  is  always  reluctant  and  frequently  refuses 
to  answer  hypothetical  questions  or  give  an  ex  parte  opinion 
as  to  the  meaning  or  application  of  the  law.  In  this  case, 
however,  it  seems  proper  to  comply  with  your  request  and 
indicate  the  present  impressions  of  the  Commission  upon  the 
several  points  you  suggest. 

The  Elkins  Bill  apparently  makes  the  following  changes  in 
the  regulating  statute : 

i.  The  carrier  is  made  criminally  liable  in  all  cases  where 
the  individual  has  been  heretofore. 

323 


RAILWAY  LEGISLATION 

2.  Willful  failure  to  publish  tariffs  as  required  by  law,  or  to 
observe  such  tariffs,  is  made  a  misdemeanor,  punishable  by  a 
fine  of  not  less  than  one  thousand  dollars  nor  more  than 
twenty  thousand  dollars  for  each  offense. 

3.  "To  offer,  grant,  or  give,  or  to  solicit,  accept,  or  receive 
any  rebate,  concession,  or  discrimination  in  respect  of  the 
transportation  of  any  property  .  .  .  whereby  any  such  prop- 
erty shall,  by  any  device  whatever,  be  transported  at  a  less 
rate  than  that  named  in  the  tariffs  published  and  filed  by  such 
carrier"  is  made  an  offense,  punishable  by  like  fine  as  above. 

It" will  be  observed  that  the  word  "  discrimination"  is  used 
in  the  paragraph  above  quoted,  and  this  may  add  something 
to  the  former  law. 

It  will  be  further  observed  that  the  paragraph  quoted  applies 
solely  to  the  transportation  of  property. 

4.  Punishment  by  imprisonment  is  repealed  in  all  cases. 

5.  In   proceedings  before  the  Commission,  or  before  the 
courts,  shippers  as  well  as  carriers  may  be  included  as  parties. 

6.  The  Federal  Circuit  Courts  are  given  power  to  interfere 
by  summary  process  to  prevent  departures  from  the  published 
rates  or  other  "discriminations  forbidden  by  law." 

Broadly  speaking,  as  it  seems  to  the  Commission,  there  is 
no  material  change  in  the  acts  or  things  prohibited  and  de- 
clared to  be  unlawful.  The  criminal  remedies  for  illegal  con- 
duct are  changed  and  the  criminal  provisions  of  the  law  made 
more  definite  and  positive.  It  is  believed  that  these  provisions 
can  now  be  enforced  as  they  could  not  before. 

Taking  up  the  specific  questions  in  your  letters  we  answer 
them  as  follows : 

First.  We  are  of  the  opinion  that  free  or  reduced  trans- 
portation given  "on  account  of"  a  shippers  business,  or  to 
influence  that  business,  which  is  the  same  thing,  would  be  a 
"rebate,  concession,  or  discrimination11  under  the  Elkins  Bill. 
Any  concession  of  that  kind  to  be  legal  should  be  specified  in 
the  tariff  and  granted  alike  to  all  shippers. 

The  granting  of  free  transportation  to  shippers  is  often  a 
serious  discrimination.  The  only  way  to  deal  with  it  effec- 

324 


APPENDIX 

lively  is  to  stop  it  altogether ;  and  since  this  law  furnishes  a 
possible  means  of  doing  so  its  enforcement  should  be  the  aim 
of  the  carriers  as  well  as  the  Commission. 

Second.  The  subject  of  drayage  has  been  discussed  by  the 
Commission  and  the  courts.  The  fair  import  of  those  discus- 
sions appears  to  be  that  this  service  is  connected  with  the 
transportation,  and  that  the  charges  therefor  should  be  stated 
in  the  published  tariffs.  This  being  so  it  would  be  a  violation 
of  the  law  to  perform  the  service  of  drayage  without  providing 
for  L  it  in  the  tariffs,  or  to  perform  it  for  one  and  not  for 
another. 

Third.  It  is  not  believed  that  the  payment  of  a  reasonable 
commission  for  soliciting  freight,  or  on  the  sale  of  tickets,  can 
be  held  to  be  a  rebate  if  the  transaction  is  an  honest  one.  If 
commissions  are  paid  with  the  intent  or  expectation  that  they 
will  be  used,  or  if  they  are  used,  for  the  purpose  or  with  the 
effect  of  granting  a  concession,  the  payment  of  such  commis- 
sions would  doubtless  be  held,  and  ought  to  be  held,  a  violation 
of  the  law. 

Fourth.  The  Commission  has  held  that  the  present  statute 
requires  the  publication  of  export  and  import  tariffs.  The 
Elkins  Bill  does  not  apparently  change  the  requirements  of  the 
law  in  this  respect,  but  it  does  afford  the  means  for  enforcing 
those  requirements. 

Fifth.  It  is  difficult  to  see  how  the  practice  of  charging 
lower  rates  to  those  who  are  establishing  new  industries  than 
are  charged  at  the  same  time  to  shippers  of  the  same  articles 
between  the  same  points  can  be  excepted  from  the  operation 
and  obligations  of  the  law,  however  unobjectionable  such  a 
practice  may  be  from  a  railroad  and  general  economic  stand- 
point. 

Sixth.  We  prefer  not  to  express  an  opinion  at  this  time 
as  to  whether  railroads  may  lawfully  transport  supplies  for  each 
other  at  reduced  rates. 

Seventh.  The  Commission  has  held  that  storage  is  a  part 
of  the  service  of  transportation  which  the  carrier  performs,  and 
that  the  charges  for  that  service  should  be  published  in  the 

325 


RAILWAY   LEGISLATION 

tariffs.  The  rendering  of  this  service  without  such  publica- 
tion, or  the  rendering  of  it  to  one  shipper  and  not  to  another, 
would  seem  to  be  in  plain  violation  of  the  Elkins  law. 

Eighth.  Generally  speaking  the  divisions  of  a  reasonable 
rate  between  connecting  carriers  is  a  matter  of  indifference  to 
the  public.  If,  however,  an  allowance  is  made  to  a  private 
road  for  only  nominal  service  it  would  be  a  "  concession  or 
discrimination."  The  question  would  seem  to  be  in  each 
case  whether  the  arrangement  was  reasonable  and  free  from 
discriminating  design  or  effect. 

Ninth.  The  first  section  of  the  Elkins  Bill  appears  to  refer 
exclusively  to  the  transportation  of  property.  The  third  sec- 
tion, investing  the  Circuit  Courts  with  additional  jurisdiction, 
covers  both  property  and  passengers. 

You  will  understand  that  the  foregoing  are  in  the  nature  of 
first  impressions,  and  that  the  Commission  would  not  feel  pre- 
cluded by  anything  herein  said  from  modifying  the  views  above 
expressed  in  deciding  an  actual  controversy  after  hearing  both 
sides. 

The  Commission  appreciates  the  difficulty  of  applying  the 
hard  and  fast  rules  of  a  statute  to  unlike  and  changing  con- 
ditions, and  is  not  infrequently  embarrassed  by  the  want  of 
discretionary  authority.  We  believe  that  these  recent  amend- 
ments will  prove  highly  efficient  in  their  operation,  because 
we  are  confident  that  the  law  in  its  present  form  will  be  sup- 
ported by  prevailing  railroad  sentiment  and  that  in  the  efforts 
to  enforce  it  the  Commission  will  have  the  cooperation  of 
railway  managers  generally. 

Yours  very  truly, 

(Signed)  MARTIN  A.  KNAPP, 

Chairman. 


326 


INDEX 


Abbreviating  charters,  82. 

Acceptance  of  the  Constitution,  98. 

Access  to  books,  158. 

Act  to  regulate  commerce,  events 
preceding  the  same,  189 ;  text  of 
law,  Appendix  III. 

Adams,  H.  C.,  quoted,  27,  222. 

Administrative  agents,  65. 

Advisory  Councils,  suggested  plan 
for,  36;  appointive  and  elective 
members,  37 ;  no  salaries  for,  38 ; 
territorial  basis  of,  38  ;  aim  of,  40 ; 
relation  to  Interstate  Commerce 
Commission,  41 ;  and  present  or- 
der, 42;  beginnings  of,  43;  in 
other  countries,  43 ;  beneficial  in- 
fluence of,  47. 

Anti-trust  law,  242. 

Archaic  features  of  charters,  16,  78. 

Articles  of  incorporation,  contents 
of,  in  ;  illustration  of,  Appendix 
II. 

Baltimore  and  Ohio,  laying  of  first 
rail,  3 ;  charter  of,  Appendix  I. 

Basis  of  all  legislation,  249. 

Board  of  directors,  powers  of,  56. 

Boards  of  internal  improvements, 
66. 

Brimson  case,  236. 

Bureaus  of  chambers  of  commerce, 
35- 

Capital  stock,  76. 

Charters,  early,  53 ;  limitations  on 
life  of,  69;  miscellaneous  provi- 
sions, 74;  later,  80;  of  consoli- 


dated companies,  87 ;  previously 
granted,  100 ;  special,  100 ;  power 
to  annul,  102. 

Classification  of  freight,  213;  na- 
tional, 255. 

Classification  of  railways,  lack  of, 
18;  in  England,  19;  in  France, 
19;  in  Prussia,  19;  in  Holland, 
20;  in  Austria- Hungary,  20;  in 
Italy,  20;  convenience  of,  20. 

Commissioners,  55. 

Commissions :  first  commission 
law,  65;  composition  of,  164; 
qualifications,  165;  jurisdiction, 
166 ;  advisory  and  regulative,  167 ; 
summary  of  laws  relating  to,  170 ; 
Massachusetts  law,  Appendix  III. 

Competition,  not  adhered  to,  21. 

Conflict  between  special  and  gen- 
eral laws,  88. 

Consolidations,  77,  137. 

Constitutional  provisions,  97. 

Construction,  economic  necessity 
of,  23 ;  deliberations  over,  25. 

Cooperation  among  railways,  239, 

257. 

Corporate  life,  117. 

Cullom  Bill,  243;  number  of 
changes  in,  245 ;  power  of  com- 
mission under,  248;  opposition 
to,  259. 

Cullom,  Senator,  quoted,  223. 

Declaration  of  public  utility,  55. 
Definitions,  in  Code  of  Per  Diem 
Rules,  23 ;  lack  of  in  charters  and 


l  Because  of  the  full  Table  of  Contents  and  the  topical  arrangement  of 
the  material,  it  was  not  thought  expedient  to  prepare  an  elaborate  index 
covering  every  point. 

327 


INDEX 


laws,  24 ;  found  in  Canadian  and 

English  law,  24. 
Determination  of  route,  121. 
Discriminations,  in  early  charters, 

64;  statutory  provisions  on,  148, 

208. 

Early  and  late,  relative  terms,  80. 

Early  general  laws :  characteristics, 
10 ;  progress  by  1870,  n  ;  Massa- 
chusetts law  of  1808,  59 ;  discus- 
sion of,  88. 

Early  railway  charters:  general 
characteristics,  53 ;  provisions  on 
rates,  56. 

Economic  adjustments,  29. 

El  kins  law,  Supplement  I. 

Ely,  R.  T.,  quoted,  169. 

Eminent  domain  and  public  use, 
101. 

Equipment,  126. 

Fines,  258. 

Foreign  experience,  value  of,  15. 

Foreign  side-lights,  14. 

Free  transportation,  104. 

General  laws,  advantages  of,  n; 
first  appearance  of,  80-82;  cor- 
porations organized  under,  99; 
existing  laws,  108. 

Hadley,  A.  T.,  quoted,  197,  207. 

Harmony  and  antagonism  of  inter- 
ests, 29;  causes  of  lack  of  har- 
mony, 30. 

Import  rates,  226,  229. 

Internal  improvements,  beginnings 
of  national  system,  25;  Bonus 

%  Bill,  25 ;  Cumberland  Road  bill, 
25;  under  Adams  and  Jackson, 
26;  nature  of  arguments,  27; 
decline  of  system,  28;  boards 
of,  66. 

Intersections,  junctions,  and  con- 
solidations, 103. 


Interstate  Commerce  Commission, 
report  of  1898,  31;  conferences, 
with  railways,  32 ;  aim  of,  33  ;  past 
and  future  of,  187 ;  principles  of 
decisions, 195  ;  power  over  rates, 
230;  power  to  secure  evidence, 
234 ;  interpretation  of  Elkins  law, 
Supplement  II. 

James,  E.  J.,  quoted,  190,  191. 
Japan,  method  of  granting  charters, 

22. 

Johnson,  E.  R.,  quoted,  197. 
Joint  Traffic  decision,  241. 
Joint  use  of  track,  79. 

Lack  of  classification  of  railways, 

18. 

Land  grants,  first  act,  189. 
Later  charters,  terms  applicable  to, 

108. 
Legislature,  powers  reserved  to  in 

early  charters,  67. 
Long  and  short  haul,  145 ;  decisions 

on,  224. 

Miscellaneous  provisions,  74. 
Munn  vs.  Illinois,  193. 

National  classification,  255. 
Newcomb,  H.  T.,  quoted,  240. 
Northern  Pacific  Railway  charter, 
its  inception,  83. 

Patrons  of  Husbandry,  influence 
of,  190. 

Peculiarities  of  the  railway  busi- 
ness, 14. 

Pooling,  22,  105,  140,  220. 

Preambles,  54. 

Propositions,    three    general,    31, 

243- 
Publicity,  of  rates,  62;   in  county 

papers,  63,  64. 
Public  and  private  effort  in  early 

construction,    17;     public     aid, 

102. 


3*8 


INDEX 


Punishments,  upon  whom  they 
should  fall,  253. 

Quality  of  service,  129. 

Railway  accounting,  256. 

Railway  charters:  area  of  diffusion, 
8;  characteristics  in  different 
sections,  9;  abbreviation  of,  9; 
similarity  of,  15 ;  early,  53 ;  com- 
mon points,  54. 

Railway  companies,  conditions  of 
organization,  no. 

Railway  Legislation  in  the  United 
States:  general  character,  7; 
some  defects,  12;  progress  of,  52. 

Railways,  significance  of,  3 ;  extent 
of  in  the  United  States,  4 ;  be- 
ginnings of,  4 ;  influence  of,  5 ; 
industrial  departments,  34;  pub- 
lic carriers,  100. 

Rates,  early  charter  provisions  on, 
56 ;  publicity  of,  62,  151 ;  revision 
of,  151 ;  decisions  on,  205 ; 
through,  216. 

Reagan  bill,  192. 

Redemption  of  unused  tickets,  141. 

Regulation,  104. 

Reports,  annual,  159. 

Reserved  rights  of  the  state,  117. 

Reversion  to  type,  80. 


Revised    Statutes    of   the    United 

States,  section  860,  235. 
Routes  of  railways,  75. 

Safety  appliances,  early  laws  relat- 
ing to,  78. 

Sanborn,  J.  B.,  Congressional 
grants  of  land  in  aid  of  railways, 
189. 

Scalping,  141. 

Secretary  of  Commerce  and  Labor, 
to  appoint  councillors,  37. 

Seligman,  E.  R.  A.,  quoted,  228. 

Shareholders,  vote  of,  104. 

Social  circle  case,  231. 

State  classifications,  may  obstruct 
progress,  13. 

State  ownership,  72. 

State  participation,  71 ;  subscrip- 
tions to  stock,  73. 

Stocks  and  bonds,  issues  of,  162. 

Taxation,  limitation  on  power  of, 
70;  exemption  from,  71. 

Through  rates,  216. 

Through  trains  and  routes,  133. 

Toll,  as  a  special  charge,  59,  79. 

Trans-Missouri  Freight  Associa- 
tion, 240. 

Troy  case,  227. 


Voting,  graded  system,  77. 


329 


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